Is Creative World School obligated for damages arising out of the School's operation?
Creative_World_School Franchise · 2025 FDDAnswer from 2025 FDD Document
ADDENDUM TO FRANCHISE DISCLOSURE DOCUMENT FOR CREATIVE WORLD SCHOOLS FRANCHISING COMPANY, INC. STATE OF MARYLAND
- The following is added to the disclosure document:
No statement, questionnaire or acknowledgement 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 behalf of the Franchisor. This provision supersedes any other term of any document executed in connection with the franchise.
- Sections (c) and (m) of Item 17 are amended by adding the following language:
The general release required as a condition of renewal, sale, and/or assignment or transfer will not apply to any liability under the Maryland Franchise and Disclosure Law (the "Maryland Law").
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- Item 17 is amended by adding the following language after the table:
- (a) The provision of the Franchise Agreement that provides for termination upon bankruptcy of the franchisee may not be enforceable under federal bankruptcy law (11 U.S.C. Section 101, et seq.)
- (b) Any claims arising under the Maryland Law must be brought within 3 years after the grant of the franchise.
- (c) A franchisee may bring a lawsuit in Maryland for claims arising under the Maryland Franchise Registration and Disclosure Law.
Source: Item 23 — RECEIPTS (FDD pages 80–247)
What This Means (2025 FDD)
The 2025 Franchise Disclosure Document for Creative World School includes a rider for use in Maryland that addresses liability and claims. Specifically, for franchisees in Maryland, any statement, questionnaire, or acknowledgement signed by the franchisee at the start of the franchise relationship cannot waive claims under Maryland franchise law, including claims of fraud. This means Creative World School cannot use these documents to disclaim reliance on their behalf. This provision takes precedence over any conflicting terms in other franchise documents.
Furthermore, the general release required for renewal, sale, assignment, or transfer of the franchise does not apply to liabilities arising under the Maryland Franchise Registration and Disclosure Law. This ensures that franchisees in Maryland retain their rights to pursue claims under this law, even when signing a general release.
Additionally, franchisees operating a Creative World School in Maryland have the right to bring a lawsuit against the franchisor in Maryland for claims arising under the Maryland Franchise Registration and Disclosure Law. However, any claims under this law must be brought within 3 years after the franchise is granted. These stipulations protect the franchisee's rights under Maryland law and ensure that Creative World School cannot use certain clauses to avoid liability for damages arising from the School's operation within the bounds of Maryland law.