What is the dependency for the Maryland provisions to be annexed to and form part of the Cream franchise agreement?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
The following provisions are annexed to and form part of this Agreement if and only if, and in such case to the extent that: (a) you are a resident of the State of Maryland; or (b) your franchised business is or will be operated in the State of Maryland; or (c) the offer of the franchise was made or accepted in the State of Maryland.
- The following is added to the end of Sections 12.C(4), 12.E, 13.A(8), and 15.D of the Agreement:
Pursuant to COMAR 02.02.08.16L, any release required as a condition of renewal and/or assignment/transfer will not apply to claims arising under the Maryland Franchise Registration and Disclosure Law.
- The following is added to the end of Section 14.A of the Agreement:
This provision might not be enforceable under federal bankruptcy law (11 U.S.C. Sections 101 et seq.).
- Section 17.F of the Agreement is supplemented by adding the following to the end of the Section:
A Maryland franchise regulation states that it is an unfair or deceptive practice to require a franchisee to waive its right to file a lawsuit in Maryland claiming a violation of the Maryland Franchise Registration and Disclosure Law. In light of the Federal Arbitration Act, there is some dispute as to whether this forum selection requirement is legally enforceable.
- Section 17.H of the Agreement is supplemented by adding the following to the end of the Section.
A franchisee may bring a lawsuit in Maryland for claims arising under the Maryland Franchise Registration and Disclosure law.
- The following is added to the end of Section 17.L of the Agreement:
Any claims arising under the Maryland Franchise Registration and Disclosure Law must be brought within 3 years after the grant of the franchise.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, the Maryland-specific provisions are added to and become part of the franchise agreement if one or more of the following conditions are met: (a) the franchisee is a resident of Maryland, (b) the franchised business is or will be operated in Maryland, or (c) the franchise offer was made or accepted in Maryland. This ensures that franchisees operating or residing in Maryland receive the protections and are subject to the specific regulations of Maryland franchise law.
This conditionality is important for prospective Cream franchisees because it clarifies when the additional Maryland provisions apply. If a franchisee lives in Maryland or operates their Cream franchise there, these specific provisions will override conflicting terms in the standard franchise agreement to comply with Maryland law. This includes aspects such as releases related to renewal or transfer, and the ability to bring lawsuits in Maryland under the Maryland Franchise Registration and Disclosure Law.
For example, the FDD notes that any release required as a condition of renewal or assignment/transfer will not apply to claims arising under the Maryland Franchise Registration and Disclosure Law, as per COMAR 02.02.08.16L. Additionally, any claims under the Maryland Franchise Registration and Disclosure Law must be brought within three years after the franchise is granted. These stipulations provide added protection to franchisees operating within Maryland, ensuring compliance with local regulations and offering a specific timeframe for legal recourse.