In Maryland, can a statement signed by a Craters & Freighters franchisee disclaim reliance on statements made by the franchisor or its representatives?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
MARYLAND
Item 17.f, Termination by Franchisor with Cause, of the Franchise Disclosure Document and Section 25.3.12 of the Franchise Agreement are revised to include the following: "Franchisor's termination of the Franchise Agreement because of Franchisee's bankruptcy may not be enforceable under applicable federal law (11 U.S.C.A. 101 et seq.)."
Item 17.v, Choice of Forum, of the Franchise Disclosure Document and Section 32.1 of the Franchise Agreement are revised to include the following: "Franchisee may bring a lawsuit in Maryland for claims under the Maryland Franchise Registration and Disclosure Law.
The following language is added to the Franchise Agreement: "All representations requiring prospective franchisees to assent to a release, estoppel or waiver of liability are not intended to nor shall they act as a release, estoppel or waiver of any liability incurred under the Maryland Franchise Registration and Disclosure Law."
Item 17.c, Requirements for Franchisee to Renew or Extend, and Item 17.m, Conditions for Franchisor's Approval of Transfer, of the Franchise Disclosure Document, and Section 32.4 of the Franchise Agreement are revised to include the following: "The general release required as a condition of renewal and/or assignment/transfer will not apply to any liability under the Maryland Franchise Registration and Disclosure Law."
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to the 2025 Craters & Freighters Franchise Disclosure Document, any representations requiring prospective franchisees to assent to a release, estoppel, or waiver of liability do not act as a release, estoppel, or waiver of any liability incurred under the Maryland Franchise Registration and Disclosure Law. This means that Craters & Freighters cannot enforce a clause that prevents a franchisee from holding them liable under Maryland franchise law based on statements made during the franchise sales process. This protection is specifically designed to safeguard franchisees' rights under Maryland law.
This provision ensures that franchisees in Maryland retain their legal rights and remedies under the Maryland Franchise Registration and Disclosure Law, regardless of any statements they might sign during the commencement of the franchise relationship. This is particularly relevant in cases where a franchisee might claim they were induced into the agreement based on misleading or false statements made by Craters & Freighters or its representatives. The FDD also states that any general release required as a condition of renewal and/or assignment/transfer will not apply to any liability under the Maryland Franchise Registration and Disclosure Law.
In practical terms, a Craters & Freighters franchisee in Maryland cannot be compelled to waive their rights to sue or hold the franchisor accountable for violations of Maryland franchise law, even if they have signed a document that appears to do so. This addendum strengthens the franchisee's position by ensuring that the franchisor cannot use contractual language to circumvent the protections afforded by Maryland law. This is a significant benefit for prospective franchisees as it provides an additional layer of legal security.