For Chem Dry franchises sold in Maryland, what statutes and regulations is the addendum intended to comply with?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
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| FRANCHISEE | CHEM-DRY, INC. |
|---|---|
| By: | |
| Title: | |
| Date: |
MARYLAND
This Addendum relates to franchises sold in the state of Maryland and/or to residents of the state of Maryland and is intended to comply with Maryland statutes and regulations. In consideration of the execution of the Franchise Agreement, CDI and Franchisee agree to amend the Agreement as follows:
- The Franchise Agreement is amended by the addition of the following language:
The representations hereunder 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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- Our right to terminate pursuant to Section 15(15) of the Franchise Agreement if you commence bankruptcy may not be enforceable under federal bankruptcy law (11 U.S.C.A. 101 et seq.).
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- The acknowledgements Section 1(a)(iii) of the Franchise Agreement and the following language from Section 18 (a) of the Franchise Agreement, are deleted: "By signing this Agreement, FRANCHISEE certifies that it has received and reviewed CDI's Franchise Disclosure Document along with its Exhibits and this Agreement and its Exhibits fourteen (14) calendar days, or a different period if applicable where FRANCHISEE is located, prior to signing this Agreement or prior to paying any monies to CDI or its affiliates."
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- Section 17 of the Franchise Agreement is amended by the addition of the following language:
Pursuant to the Maryland Franchise Registration and Disclosure Law, the Franchisee is permitted to bring a lawsuit in Maryland for claims arising under this Law.
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- Any general release required as a condition of renewal, sale, and/or assignment or transfer of the Store or the Franchise Agreement shall not apply to any liability under the Maryland Franchise Registration and Disclosure Law.
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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 Registration and Disclosure 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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- Sections 13 and 14 of the Agreement is amended by the addition of the following language:
Pursuant to COMAR 02.02.08.16L, the general release required as a condition of assignment or transfer shall not apply to any liability under the Maryland Franchise Registration and Disclosure Law.
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- Any claims arising under the Maryland Franchise Registration and Disclosure Law must be brought within 3 years after the grant of the franchise.
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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.
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- No statement, questionnaire, or acknowledgment 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. Maryland franchisees and/or those operating outlets within the State of Maryland are not to sign the Disclosure Questionnaire attached as Exhibit I.
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- All other rights, obligations, and provisions of the Franchise Agreement shall remain in full force and effect. This Addendum is incorporated in and made a part of the Franchise Agreement for the State of Maryland.
In all other respects, the Franchise Agreement will be construed and enforced according to its terms.
| FRANCHISEE | CHEM-DRY, INC.
Source: Item 22 — CONTRACTS (FDD page 68)
What This Means (2024 FDD)
According to Chem Dry's 2024 Franchise Disclosure Document, the addendum for franchises sold in Maryland is designed to ensure compliance with Maryland statutes and regulations. Specifically, the addendum aims to address the Maryland Franchise Registration and Disclosure Law. This law is referenced multiple times within the addendum, indicating its importance in governing the franchise relationship in Maryland.
Several provisions within the addendum directly relate to protecting the franchisee's rights under the Maryland Franchise Registration and Disclosure Law. For example, the addendum clarifies that representations made by the franchisor do not act as a waiver of liability under this law. It also ensures that franchisees can bring lawsuits in Maryland for claims arising under this law and that any general release required upon renewal or transfer does not apply to liabilities under the same law.
Furthermore, the addendum addresses potential conflicts between the franchise agreement and Maryland regulations. It acknowledges a Maryland regulation that considers it an unfair practice to require a franchisee to waive their right to file a lawsuit in Maryland for violations of the Maryland Franchise Registration and Disclosure Law. The addendum also specifies that claims under this law must be brought within three years after the franchise grant. These stipulations collectively aim to protect franchisees' rights and ensure adherence to Maryland's franchise-specific legal framework.