What happens if a City Publications franchisee is adjudicated bankrupt?

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

This means that while City Publications' standard agreement includes a clause for termination upon bankruptcy, federal law, particularly in Maryland, might override this clause, offering some protection to franchisees who file for bankruptcy. This discrepancy highlights the importance of understanding both the franchise agreement and the relevant state and federal laws.

Prospective franchisees should be aware of this clause and its potential limitations, especially if they are considering operating a City Publications franchise in Maryland. It would be prudent to seek legal counsel to fully understand the implications of bankruptcy on the franchise agreement and to assess the enforceability of the termination clause in their specific jurisdiction.