How does federal bankruptcy law potentially affect the termination clause in the City Publications Franchise Agreement in Maryland?

According to City Publications' 2025 Franchise Disclosure Document, Section 18B1.h of the Franchise Agreement allows City Publications to terminate the agreement if the franchisee declares bankruptcy. However, for franchisees in Maryland, this termination clause may not be enforceable due to federal bankruptcy law (11 U.S.C. Section 101, et seq.).

This means that if a City Publications franchisee in Maryland files for bankruptcy, City Publications might not be able to automatically terminate the franchise agreement. Federal bankruptcy law could protect the franchisee's right to continue operating the franchise, subject to the terms and conditions of the bankruptcy proceedings.

Prospective franchisees in Maryland should be aware of this potential conflict between the franchise agreement and federal law. It is advisable to consult with a legal professional to fully understand their rights and obligations in the event of bankruptcy. This could significantly impact the franchisee's ability to retain the franchise and its assets during financial hardship.