In Maryland, is the Bumper Man Franchise Agreement provision for termination upon bankruptcy always enforceable?

According to Bumper Man's 2025 Franchise Disclosure Document, the provision in the Franchise Agreement that allows for termination upon bankruptcy may not be enforceable in Maryland. This is because federal bankruptcy law (11 U.S.C. Section 101 et seq.) may supersede the terms outlined in the franchise agreement.

For a prospective Bumper Man franchisee in Maryland, this means that if they were to file for bankruptcy, Bumper Man's ability to terminate the franchise agreement solely based on that bankruptcy filing could be limited. Federal law is designed to protect debtors during bankruptcy proceedings, and certain contractual rights that allow for termination upon bankruptcy are often deemed unenforceable to give the debtor a chance to reorganize their finances.

It is important for potential franchisees to understand that this does not mean bankruptcy completely shields them from the consequences of financial distress. Bumper Man may still have grounds for termination based on other breaches of the franchise agreement, such as failure to meet performance standards or non-payment of royalties. However, the specific clause related to bankruptcy may not be automatically enforced. Franchisees should seek legal counsel to fully understand their rights and obligations under both the franchise agreement and federal bankruptcy law.