For City Wide franchisees in Maryland, are claims arising under the Maryland Franchise Registration and Disclosure Law subject to the choice of forum and choice of law provisions in the Franchise Agreement?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
The "Summary" sections of ITEM 17(v) and 17(w) entitled Choice of Forum and Choice of Law, respectively, are amended by the addition of the following language:
", except for claims arising under the Maryland Franchise Registration and Disclosure Law (Section 14-216[25]), including the right to submit matters to the jurisdiction of the courts of Maryland."
ITEM 17 of the Franchise Disclosure Document and sections of the Franchise Agreement are amended to state that you may bring a lawsuit in Maryland for claims arising under the Maryland Franchise Registration & Disclosure Law. Any claims arising under the Maryland Franchise Registration and Disclosure Law must be brought within three years after the grant of the franchise.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to the 2025 City Wide Franchise Disclosure Document, for franchisees in Maryland, claims arising under the Maryland Franchise Registration and Disclosure Law are not subject to the standard choice of forum and choice of law provisions in the Franchise Agreement. Specifically, the FDD amends ITEM 17(v) and 17(w) regarding Choice of Forum and Choice of Law to exclude claims arising under the Maryland Franchise Registration and Disclosure Law. This exclusion includes the franchisee's right to submit matters to the jurisdiction of the courts of Maryland. This means a City Wide franchisee in Maryland can bring claims under Maryland franchise law in Maryland courts, regardless of what the standard agreement says about where disputes should be resolved.
This modification is significant for prospective City Wide franchisees in Maryland because it allows them to pursue legal claims related to franchise registration and disclosure within their own state's legal system. Without this provision, franchisees might be required to litigate such disputes in a forum or under a legal framework less familiar or convenient to them, potentially increasing costs and complexity. The FDD also states that any claims arising under the Maryland Franchise Registration and Disclosure Law must be brought within three years after the grant of the franchise.
Furthermore, the FDD clarifies that general releases required as a condition of renewal, refunds, or transfers do not apply to any liability under the Maryland Franchise Registration and Disclosure Laws. This ensures that franchisees cannot inadvertently waive their rights under Maryland franchise law by signing standard release forms during the course of their franchise relationship with City Wide. This protection strengthens the franchisee's position by preserving their ability to seek legal recourse under Maryland law if necessary.
In summary, City Wide franchisees in Maryland receive specific protections under the Franchise Agreement related to claims arising from the Maryland Franchise Registration and Disclosure Law. These protections ensure that franchisees can pursue legal remedies in their home state and that their rights under Maryland law are not unintentionally waived through standard contractual provisions.