In Maryland, does the release required by Cream as a condition of renewal, sale, or assignment/transfer apply to claims arising under the Maryland Franchise Registration and Disclosure Law?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
MARYLAND
-
- Under COMAR 02.02.08.16L, any release required as a condition of renewal, sale and/or assignment/transfer will not apply to claims or liability arising under the Maryland Franchise Registration and Disclosure Law.
-
- The Franchise Agreement and Area Development Agreement provide for termination upon bankruptcy. This provision might not be enforceable under federal bankruptcy law (11 U.S.C. Sections 101 et seq.), but we will enforce it to the extent enforceable.
-
- A franchisee may bring suit 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 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, any release required from a franchisee as a condition of renewal, sale, or assignment/transfer of the franchise in Maryland does not apply to claims or liabilities arising under the Maryland Franchise Registration and Disclosure Law. This protection is ensured by COMAR 02.02.08.16L, which is referenced in the franchise agreement and area development agreement. This means that even if a franchisee signs a general release, they still retain the right to pursue claims related to violations of Maryland's franchise laws.
This provision is particularly relevant for prospective Cream franchisees in Maryland as it safeguards their rights under the state's franchise regulations. It prevents Cream from using a release to shield itself from liability for potential violations of the Maryland Franchise Registration and Disclosure Law. These protections apply if the franchisee is a resident of Maryland, the franchised business operates in Maryland, or the franchise offer was made or accepted in Maryland.
Cream's FDD also specifies that any claims arising under the Maryland Franchise Registration and Disclosure Law must be brought within three years after the grant of the franchise. This statute of limitations is an important consideration for franchisees, as it sets a deadline for pursuing legal action related to franchise law violations. Cream's franchise and area development agreements include stipulations that reiterate these protections and limitations, ensuring franchisees are aware of their rights and obligations under Maryland law.