For Cinnabon franchises offered and sold in Maryland, or to Maryland residents, are there any conditions in the Franchise Agreement's Section 2.2.B(iii) or Section 16.3.I that would relieve Cinnabon from liability imposed by the Maryland Franchise Registration and Disclosure Law?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
In recognition of the requirements of the Maryland Franchise Registration and Disclosure Law, Md. Code Bus. Reg. §§ 14-201 through 14-233, the Franchise Agreement, for franchises offered and sold in the State of Maryland or to Maryland residents, is amended to include the following:
-
- No release language required by Section 2.2.B(iii) (Conditions for Renewal Term) of the Franchise Agreement (concerning conditions precedent to renewal), or Section 16.3.I. (Control Transfer) of the Franchise Agreement (concerning conditions precedent to transfer), will relieve us or any other person, directly or indirectly, from liability imposed by the Maryland Franchise Registration and Disclosure Law.
-
- Section 3.1 (Initial Franchise Fee) of the Franchise Agreement is amended as follows:
Based upon the franchisor's financial condition, the Maryland Securities Commissioner has required a financial assurance. Therefore, all initial fees and payments owed by franchisees shall be deferred until the franchisor completes its pre-opening obligations under the Franchise Agreement. If a franchisee signs a Multi-Unit Addendum to a Franchise Agreement, all initial fees and payments owed by such franchisee under each of the Franchise Agreements that is subject to the Multi-Unit Addendum shall be deferred until the franchisor completes its pre-opening obligations under the applicable Franchise Agreement.
-
- You may bring a lawsuit in Maryland for claims arising under the Maryland Franchise Registration and Disclosure Law.
-
- Section 20.3 (General Release) of the Franchise Agreement is amended to include the following:
The general release required as a condition of sale shall not apply to any liability under the Maryland Franchise Registration and Disclosure Law.
-
- 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.
-
- Any claims arising under the Maryland Franchise Registration and Disclosure Law must be brought within 3 years after the grant of the franchise.
Source: Item 23 — Receipts (FDD pages 114–399)
What This Means (2025 FDD)
According to Cinnabon's 2025 Franchise Disclosure Document, for franchises offered and sold in Maryland or to Maryland residents, the Franchise Agreement is amended to ensure compliance with the Maryland Franchise Registration and Disclosure Law. Specifically, no release language required by Section 2.2.B(iii), which pertains to conditions for renewal, or Section 16.3.I, which concerns conditions for transfer of the Franchise Agreement, will relieve Cinnabon from liability under the Maryland Franchise Registration and Disclosure Law. This amendment ensures that Cinnabon cannot use these sections to avoid obligations imposed by Maryland law.
This provision is significant for prospective Cinnabon franchisees in Maryland because it protects their rights under Maryland's franchise laws. It prevents Cinnabon from including clauses in the Franchise Agreement that might waive or release the franchisor from liabilities imposed by Maryland law during renewal or transfer of the franchise. This ensures that franchisees retain their legal recourse and protections afforded by Maryland law throughout their relationship with Cinnabon.
Furthermore, the FDD states that all representations requiring prospective franchisees to assent to a release, estoppel, or waiver of liability will not act as a release, estoppel, or waiver of any liability incurred under the Maryland Franchise Registration and Disclosure Law. This reinforces the protection for franchisees by preventing any part of the agreement from being interpreted as a relinquishment of their rights under Maryland law. This protection extends to any general release required as a condition of sale, which shall not apply to any liability under the Maryland Franchise Registration and Disclosure Law.
In summary, these amendments to the Cinnabon Franchise Agreement for Maryland franchisees are designed to uphold the protections provided by the Maryland Franchise Registration and Disclosure Law. They prevent Cinnabon from using specific clauses related to renewal, transfer, or general releases to circumvent its legal responsibilities to franchisees in Maryland, thereby safeguarding the franchisees' rights and ensuring compliance with state law.