What is the potential conflict between the Canine Dimensions Franchise Agreement's arbitration clause and Maryland franchise regulations?

According to Canine Dimensions's 2025 Franchise Disclosure Document, there is a potential conflict between the franchise agreement's arbitration clause and Maryland franchise regulations. The Franchise Agreement stipulates that disputes are resolved through arbitration. However, 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.

The FDD acknowledges that because of the Federal Arbitration Act, there is some dispute as to whether this forum selection requirement is legally enforceable. This means that while Canine Dimensions prefers disputes to be settled through arbitration, a Maryland franchisee might still have the right to pursue a lawsuit in Maryland courts if they believe the franchisor has violated Maryland franchise law.

For a prospective Canine Dimensions franchisee in Maryland, this addendum is important because it clarifies their rights under Maryland law, potentially allowing them to pursue legal action in Maryland despite the arbitration clause in the franchise agreement. It is advisable for prospective franchisees to seek legal counsel to fully understand their rights and options in case of a dispute with Canine Dimensions.