For Carvel franchises offered and sold in Maryland, or to Maryland residents, what sections of the Franchise Agreement are amended to ensure that required releases do not relieve Carvel from liability imposed by the Maryland Franchise Registration and Disclosure Law?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
ndirectly, from liability imposed by the laws on franchising of the State of Indiana.
-
- Section 15.4.B. (Post-Term) of the Franchise Agreement is revised to limit the geographical extent of the post-term covenant not to compete to an area of reasonable size for all franchises sold in the State of Indiana.
-
- Section 15.5 (Remedies) of the Franchise Agreement will not apply to franchises offered and sold in the State of Indiana.
-
- Notwithstanding the terms of Section 4 (Territorial Rights) of the Franchise Agreement, we will not compete unfairly with you within a reasonable area.
INDIANA ADDENDUM TO PERSONAL COVENANTS AGREEMENT
Notwithstanding anything to the contrary stated in the Personal Covenants Agreement, the following provisions will supersede and apply:
- The Personal Covenants Agreement is revised to limit the geographical extent of the covenant not to compete to an area of reasonable size for all franchises sold in the State of Indiana.
MARYLAND ADDENDUM TO FRANCHISE AGREEMENT
In recognition of the requirements of the Maryland Franchise Registration and Disclosure Law, Md. Code Bus. Reg. §§ 14-201 through 14-233, the Franchise Agreement, for franchises offered and sold in the State of Maryland or to Maryland residents, is amended to include the following:
-
- No release language required by Section 2.2.B(iii) (Conditions for Renewal Term) of the Franchise Agreement (concerning conditions precedent to renewal), or Section 16.3.I. (Control Transfer) of the Franchise Agreement (concerning conditions precedent to transfer), will relieve us or any other person, directly or indirectly, from liability imposed by the Maryland Franchise Registration and Disclosure Law.
-
- Section 3.1 (Initial Franchise Fee) of the Franchise Agreement is amended as follows:
Based upon the franchisor's financial condition, the Maryland Securities Commissioner has required a financial assurance. Therefore, all initial fees and payments owed by franchisees shall be deferred until the franchisor completes its pre-opening obligations under the Franchise Agreement. If a franchisee signs a Multi-Unit Addendum to a Franchise Agreement, all initial fees and payments owed by such franchisee under each of the Franchise Agreements that is subject to the Multi-Unit Addendum shall be deferred until the franchisor completes its pre-opening obligations under the applicable Franchise Agreement.
-
- You may bring a lawsuit in Maryland for claims arising under the Maryland Franchise Registration and Disclosure Law.
-
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, several sections of the Franchise Agreement are amended for franchises offered and sold in Maryland, or to Maryland residents, to ensure that required releases do not relieve Carvel from liability imposed by the Maryland Franchise Registration and Disclosure Law. Specifically, Section 2.2.B(iii) (Conditions for Renewal Term) and Section 16.3.I. (Control Transfer) of the Franchise Agreement are amended. These sections typically contain release language required as a condition of renewal or transfer of the franchise. The amendment clarifies that this release language does not waive rights or relieve Carvel from liability under Maryland's franchise laws. Additionally, Section 20.3 (General Release) of the Franchise Agreement is amended to include that the general release required as a condition of renewal, sale, and/or assignment/transfer shall not apply to any liability under the Maryland Franchise Registration and Disclosure Law.
This means that even if a Carvel franchisee in Maryland signs a general release as part of renewing their agreement or transferring ownership, they still retain their rights to pursue claims against Carvel under the Maryland Franchise Registration and Disclosure Law. This protects the franchisee from inadvertently waiving their legal rights under Maryland law.
Furthermore, the FDD states that all representations requiring prospective franchisees to assent to a release, estoppel or waiver of liability 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. This provision reinforces the protection of franchisees' rights under Maryland law, ensuring that no part of the agreement can be interpreted as a waiver of liability under the Maryland Franchise Registration and Disclosure Law. This is a significant protection for franchisees in Maryland, ensuring that they do not unknowingly relinquish their rights under state law when signing franchise agreements or related documents.