Under what conditions can a lawsuit be brought in Maryland for claims arising under the Maryland Franchise Registration and Disclosure Law for a Carvel franchise?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
You can enter into litigation with us in Maryland for claims arising under the Maryland Franchise Registration and Disclosure Law, as long as the nature of the litigation is not the type of dispute, controversy, claim, action or proceeding which would be subject to arbitration under the Franchise Agreement.
- Any claims arising under the Maryland Franchise Registration and Disclosure Law must be brought within three years after the grant of the franchise.
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, a franchisee can enter into litigation with Carvel in Maryland for claims arising under the Maryland Franchise Registration and Disclosure Law, provided that the nature of the litigation is not subject to arbitration under the Franchise Agreement. This means that while franchisees have the right to sue Carvel for violations of Maryland franchise law, that right is limited to disputes that are not required to be resolved through arbitration.
This provision ensures that Carvel franchisees in Maryland retain their statutory rights under Maryland franchise law. However, it also carves out an exception for disputes that the Franchise Agreement mandates be handled through arbitration, a common alternative dispute resolution method. Arbitration typically involves a more streamlined and less formal process than litigation, potentially saving time and costs for both parties.
Furthermore, any claims arising under the Maryland Franchise Registration and Disclosure Law must be brought within three years after the grant of the franchise. This statute of limitations sets a deadline for franchisees to take legal action, meaning that franchisees must act promptly to protect their rights. This timeframe is important for prospective franchisees to keep in mind, as failure to bring a claim within this period could result in the claim being time-barred.
In addition, 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. Also, 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. These stipulations protect the franchisee from unintentionally waiving their rights under the Maryland Franchise Registration and Disclosure Law.