What is the impact of the amendment to the Canine Dimensions Franchise Agreement regarding representations requiring a prospective franchisee to assent to a general release?
Canine_Dimensions Franchise · 2025 FDDAnswer from 2025 FDD Document
as a release, estoppel or waiver of any liability incurred under the Maryland Franchise Registration and Disclosure Law.
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- The Franchise Agreement is hereby amended to state that any representations which require a prospective franchisee to assent to any general release, estoppel or waiver of liability as a condition of purchasing a franchise are not intended to nor shall they act as a release, estoppel or waiver of any liability incurred under the Maryland Franchise Registration and Disclosure Law.
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- The Franchise Agreement provides that disputes are resolved through arbitration. A Maryland franchise regulation states that it is an unfair or deceptive practice to require a franchisee to waive its right to file a lawsuit in Maryland claiming a violation of the Maryland Franchise Law. In light of the Federal Arbitration Act, there is some dispute as to whether this forum selection requirement is legally enforceable.
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Source: Item 22 — CONTRACTS (FDD page 36)
What This Means (2025 FDD)
According to Canine Dimensions's 2025 Franchise Disclosure Document, the Franchise Agreement is amended to clarify the impact of representations requiring a prospective franchisee to agree to a general release, estoppel, or waiver of liability. Specifically, any such representations are not intended to, and will not, act as a release, estoppel, or waiver of liability incurred under the Maryland Franchise Registration and Disclosure Law. This amendment is also reflected in Exhibit G to the FDD. This change is particularly relevant for franchisees operating in Maryland.
This amendment addresses concerns related to franchisee rights under Maryland law. Maryland law prohibits a franchisor from requiring a prospective franchisee to waive liability as a condition of purchasing a franchise. The amendment ensures that franchisees in Maryland retain their rights and protections under the Maryland Franchise Registration and Disclosure Law, regardless of any general release, estoppel, or waiver of liability included in the Franchise Agreement. This provision supersedes any other term of any document executed in connection with the franchise.
For prospective Canine Dimensions franchisees, especially those in Maryland, this amendment provides assurance that they cannot be forced to relinquish their legal rights under Maryland franchise law as a condition of buying the franchise. This protection extends to claims of fraud in the inducement or disclaiming reliance on statements made by the franchisor or its representatives. This clarification helps to create a fairer balance of power between Canine Dimensions and its franchisees in Maryland, ensuring that franchisees are not unfairly disadvantaged by potentially overreaching release provisions.