If the offer of the Cream franchise was made in Delaware, but the franchisee resides in Maryland, do the Maryland provisions apply?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
MARYLAND
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 provisions are annexed to the franchise agreement if certain conditions are met. Specifically, these provisions apply if the franchisee is a resident of Maryland, the franchised business is or will be operated in Maryland, or the offer of the franchise was made or accepted in Maryland.
In the scenario where the offer of the Cream franchise was made in Delaware, but the franchisee resides in Maryland, the Maryland provisions would indeed apply. This is because one of the conditions—the franchisee being a resident of Maryland—is satisfied. Therefore, the additional provisions outlined in the FDD concerning Maryland would become part of the franchise agreement.
These Maryland-specific provisions address various aspects of the franchise agreement, including releases, bankruptcy law, and dispute resolution. For instance, any release required as a condition of renewal or transfer will not apply to claims arising under the Maryland Franchise Registration and Disclosure Law. Additionally, the FDD notes that a franchisee may bring a lawsuit in Maryland for claims arising under this law, and any such claims must be brought within three years after the grant of the franchise. These stipulations provide additional protection to franchisees operating in Maryland, ensuring compliance with state-specific regulations and offering avenues for legal recourse within the state.