Does the addendum change any obligations of the Corner Bakery Cafe franchisee?
Corner_Bakery_Cafe Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 22: CONTRACTS]
ADDENDUM TO THE CORNER BAKERY CAFE AREA DEVELOPMENT AGREEMENT REQUIRED FOR MARYLAND DEVELOPERS
This Addendum to the Corner Bakery Cafe Area Development Agreement dated ("Development Agreement") between Best Cafe – Franchises, LLC ("Franchisor", "we", "us" or "our"), a Delaware limited liability company, and ("Developer," "you" or "your"), a, is entered into simultaneously with the execution of the Development Agreement.
- 1 The provisions of this Addendum form an integral part of, and are incorporated into the Development Agreement. This Addendum is being executed because: (A) the offer or sale of a franchise to you was made in the State of Maryland; (B) you are a resident of the State of Maryland; and/or (C) part or all of the Development Area is located in the State of Maryland.
- 2 The following is added to the end of Section 2 of the Development Agreement:
Based upon our financial condition, the Maryland Securities Commissioner has required a financial assurance. Therefore, all development fees and initial payments owed by you shall be deferred until the first Cafe under this Agreement opens.
3 The following sentence is added to the end of Sections 7 and 8:
This release shall not apply to any liability under the Maryland Franchise Registration and Disclosure Law.
4 The following sentence is added to the end of Section 10:
Notwithstanding the foregoing, you may bring a lawsuit in Maryland for claims arising under the Maryland Franchise Registration and Disclosure Law.
- 3. No statement, questionnaire, or acknowledgment signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise.
- 4. Any capitalized terms that are not defined in this Addendum shall have the meaning given them in the Franchise Agreement.
- 5. Except as expressly modified by this Addendum, the Franchise Agreement remains unmodified and in full force and effect.
ADDENDUM TO THE CORNER BAKERY CAFE FRANCHISE AGREEMENT REQUIRED FOR WASHINGTON FRANCHISEES
ADDENDUM TO THE CORNER BAKERY CAFE FRANCHISE AGREEMENT REQUIRED FOR NEW YORK FRANCHISEES
ADDENDUM TO THE CORNER BAKERY CAFE FRANCHISE AGREEMENT REQUIRED FOR MINNESOTA FRANCHISEES
Source: Item 22 — CONTRACTS (FDD page 55)
What This Means (2025 FDD)
According to the 2025 Corner Bakery Cafe Franchise Disclosure Document, addenda to the franchise agreement can modify a franchisee's obligations. Several addenda included in the FDD address specific state laws and how they interact with the franchise agreement. For example, there are addenda for Maryland, Illinois, Minnesota, Virginia, Rhode Island, Washington, and New York. These addenda are triggered if the franchise is offered or sold in that state, if the franchisee is a resident of that state, or if the Corner Bakery Cafe location will be in that state.
One key change found in several addenda is a statement ensuring that franchisees do not waive rights under state franchise laws. Specifically, these addenda state that no agreement signed by the franchisee can waive claims related to state franchise law, including fraud, or disclaim reliance on statements made by the franchisor. This provision overrides any conflicting terms in other documents. This modification protects franchisees by ensuring they retain their legal rights under state laws, regardless of what other agreements might state.
For Maryland developers, the addendum includes specific financial protections. It stipulates that all development fees and initial payments are deferred until the first Corner Bakery Cafe under the agreement opens, addressing a requirement by the Maryland Securities Commissioner based on the franchisor's financial condition. Additionally, the Maryland addendum clarifies that releases signed by the franchisee do not apply to liabilities under the Maryland Franchise Registration and Disclosure Law, and it allows franchisees to bring lawsuits in Maryland for claims arising under this law. These modifications provide significant financial and legal protections to franchisees in Maryland.
In summary, the addenda to the Corner Bakery Cafe franchise agreement can and do change the obligations and rights of franchisees, particularly in response to specific state laws. These changes range from clarifying franchisees' rights to pursue legal claims to providing financial assurances and altering payment schedules. Prospective franchisees should carefully review any addenda applicable to their situation to understand how these modifications affect their obligations and protections under the franchise agreement.