What happens if a Deck Medic franchisee files a voluntary petition in bankruptcy?
Deck_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
Maryland FDD Amendment
Amendments to the Deck Medic Franchise Disclosure Document
Item 17, "Renewal, Termination, Transfer and Dispute Resolution," is supplemented, by the addition of the following:
- D. The Franchise Agreement provides for termination upon bankruptcy. This provision may not be enforceable under federal bankruptcy law (11 U.S.C. Section 101, et seq.).
Source: Item 23 — RECEIPTS (FDD pages 43–228)
What This Means (2024 FDD)
According to Deck Medic's 2024 Franchise Disclosure Document, the franchise agreement provides for termination upon bankruptcy. However, the Maryland FDD Amendment notes that this provision may not be enforceable under federal bankruptcy law (11 U.S.C. Section 101, et seq.).
This means that while Deck Medic's standard franchise agreement includes a clause allowing them to terminate the agreement if a franchisee declares bankruptcy, this clause's enforceability is questionable, particularly in light of federal bankruptcy laws. Federal law may protect franchisees from losing their franchises solely due to bankruptcy filings.
Prospective Deck Medic franchisees should be aware of this potential conflict between the franchise agreement and federal law. It is advisable to seek legal counsel to fully understand their rights and obligations in the event of bankruptcy. Franchisees in Maryland should pay particular attention to the state-specific amendment.