What right does a Maryland Casiola franchisee have regarding lawsuits under the Maryland Franchise 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.
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- 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.
Source: Item 23 — RECEIPTS (FDD pages 47–209)
What This Means (2024 FDD)
According to the 2024 Casiola FDD, a franchisee in Maryland has the right to bring a lawsuit in Maryland for claims arising under the Maryland Franchise Registration and Disclosure Law. This amendment to the franchise agreement ensures that franchisees do not waive their right to file a lawsuit in Maryland for violations of the Maryland Franchise Law, despite any clauses suggesting dispute resolution through arbitration.
Furthermore, any general release required as a condition of renewal, sale, or transfer of the franchise does not apply to liabilities under the Maryland Franchise Registration and Disclosure Law. This means a franchisee cannot be forced to release Casiola from liabilities related to Maryland franchise law as a condition of renewing or transferring their franchise.
However, any claims arising under the Maryland Franchise Registration and Disclosure Law must be brought within three years after the grant of the franchise. Additionally, any representations requiring prospective franchisees to assent to a release, estoppel, or waiver of liability are not intended to act as a release, estoppel, or waiver of any liability incurred under the Maryland Franchise Registration and Disclosure Law. This provision ensures that franchisees retain their rights and protections under Maryland law, preventing unintentional waivers or limitations of liability.