What is the relationship between the Casiola Franchise Agreement and the Maryland Franchise Registration and Disclosure Law?
Casiola Franchise · 2024 FDDAnswer from 2024 FDD Document
Amendments to the Casiola Franchise Agreement:
In recognition of the requirements of the Maryland Franchise Registration and Disclosure Law, the parties to the attached Casiola Franchise LLC Franchise Agreement (the "Franchise Agreement"), as follows:
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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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- 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.
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- Article 18.G. of the Franchise Agreement, under the heading "Choice of Law, Non-Binding Mediation, Binding Arbitration, and Consent to Jurisdiction," shall be amended by the addition of the following statement added to Article 18.G. of the Franchise Agreement:
- A franchisee may bring a lawsuit in Maryland for claims arising under the Maryland Franchise Registration and Disclosure Law.
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- Article 18.I. of the Franchise Agreement, under the heading "Limitations of Claims," shall be amended by the addition of the following statement added to Article 18.I. of 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.
A general release required as a condition of renewal, sale and/or assignment or transfer of a Franchise Agreement shall not apply to any liability under the Maryland Franchise Registration and Disclosure Law.
Source: Item 23 — RECEIPTS (FDD pages 47–209)
What This Means (2024 FDD)
According to Casiola's 2024 Franchise Disclosure Document, the Maryland Franchise Agreement Amendment clarifies the relationship between the standard Casiola Franchise Agreement and the Maryland Franchise Registration and Disclosure Law. This amendment acknowledges the specific legal requirements in Maryland and modifies certain aspects of the standard agreement to comply with Maryland law.
Specifically, the amendment addresses dispute resolution, general releases, and limitations of claims. It clarifies that franchisees may bring lawsuits in Maryland for claims arising under the Maryland Franchise Registration and Disclosure Law, despite any arbitration clauses in the standard agreement. It also ensures that general releases required for renewal, sale, or transfer of the franchise do not apply to liabilities under Maryland's franchise law. Furthermore, any claims under the Maryland Franchise Registration and Disclosure Law must be brought within three years of the franchise grant.
These amendments are crucial for prospective Casiola franchisees in Maryland because they ensure that their rights under Maryland law are protected. The amendment overrides conflicting terms in the standard franchise agreement, providing clarity and legal certainty for franchisees operating in Maryland. Casiola is ensuring compliance with state-specific franchise regulations, which is a common practice among franchisors when expanding into different states.