Does Casiola intend for representations requiring franchisees to release liability to act as a waiver of liability under the Maryland Franchise Registration and Disclosure Law?
Casiola Franchise · 2024 FDDAnswer from 2024 FDD Document
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.
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- Each provision of this amendment shall be effective only to the extent, with respect to such provision, that the jurisdictional requirements of the Maryland Franchise Registration and Disclosure Law are met independently without reference to this amendment.
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- No statement, questionnaire or acknowledgement signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of: (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise.
Source: Item 23 — RECEIPTS (FDD pages 47–209)
What This Means (2024 FDD)
According to Casiola's 2024 Franchise Disclosure Document, the franchisor does not intend for any representations or requirements for prospective franchisees to release, estop, or waive liability to act as a release, estoppel, or waiver of any liability incurred under the Maryland Franchise Registration and Disclosure Law. This means that franchisees in Maryland retain their rights and protections under Maryland franchise law, regardless of any general releases or waivers they may sign in connection with the franchise agreement. This is further reinforced by the statement that no statement, questionnaire, or acknowledgement signed by a franchisee can waive claims under any applicable state franchise law, including fraud in the inducement, or disclaim reliance on statements made by the franchisor. This provision takes precedence over any other conflicting terms in the franchise agreement.
This protection for franchisees extends to renewals, sales, assignments, or transfers of the franchise agreement. Any general release required as a condition of these actions will not apply to liabilities arising under the Maryland Franchise Registration and Disclosure Law. This ensures that franchisees are not forced to forfeit their legal rights in order to renew, sell, or transfer their franchise. Additionally, franchisees are permitted to bring lawsuits in Maryland for claims arising under the Maryland Franchise Registration and Disclosure Law, and any such claims must be brought within three years after the grant of the franchise.
These stipulations are included in the Maryland FDD Amendment to ensure compliance with Maryland franchise law, which aims to protect franchisees from unfair or deceptive practices. The amendment clarifies that franchisees maintain their rights under Maryland law, regardless of conflicting terms in the standard franchise agreement. This provides a level of security for franchisees operating in Maryland, as it prevents the franchisor from using general releases or waivers to circumvent state franchise law.