Where must litigation be instituted for violations of Maryland Franchise Registration and Disclosure Law for a Cinnaholic franchise?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
r assignment or transfer will not apply to claims arising under the Maryland Franchise Registration and Disclosure Law.
Although the Franchise Agreement and the Development Agreement each require litigation to be instituted in a court in close proximity to our principal executive office, you must institute litigation for violations of Maryland Franchise Registration and Disclosure Law in any court of competent jurisdiction located in the State of Maryland, subject to the arbitration provisions of the Franchise Agreement and the Development Agreement.
The Franchise Agreement and Development Agreement each provide for termination upon your bankruptcy. This provision might not be enforceable under federal bankruptcy law (11. U.S.C. Sections 101 et seq.), but we will enforce it to the extent enforceable.
Any claims arising under the Maryland Franchise Registration and Disclosure Law must be brought within three years after the grant of your franchise.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 27–35)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, if a franchisee intends to litigate a violation of Maryland Franchise Registration and Disclosure Law, they must do so in a court of competent jurisdiction within the State of Maryland. This requirement applies despite any clause in the Franchise Agreement or Development Agreement that might otherwise require litigation to occur near Cinnaholic's principal executive office. However, this is subject to the arbitration provisions outlined in the Franchise Agreement and the Development Agreement.
This stipulation is specific to claims arising under Maryland's franchise laws. It ensures that Maryland franchisees have access to their local courts for disputes related to franchise registration and disclosure issues, which likely provides them with certain protections under Maryland law. This addendum overrides the standard litigation clause, which would typically favor Cinnaholic's preferred venue.
Furthermore, any claims arising under the Maryland Franchise Registration and Disclosure Law must be brought within three years after the grant of the Cinnaholic franchise. Additionally, no statement, questionnaire, or acknowledgment signed by the franchisee can waive claims under state franchise law, including fraud in the inducement, or disclaim reliance on statements made by Cinnaholic or its representatives. This provision supersedes any conflicting terms in any document executed in connection with the franchise, reinforcing franchisee rights under Maryland law.