What item of the Degree Wellness Franchise Agreement is supplemented by the Maryland Amendment?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
t would relieve a person from liability under the Franchise Registration and Disclosure Law. Item 17 of the Franchise Disclosure Document is amended by adding: any general release required as a condition of sale and/or assignment/transfer shall not apply to any liability under the Maryland Franchise Registration and Disclosure Law.
The Franchise Agreement and Franchise Disclosure Document shall be deemed amended so that no release, assignment, novation, waiver or estoppel is required if it would violate the Maryland Franchise Registration and Disclosure Law. Nothing in the franchise agreement, including any acknowledgments or representations, shall be deemed a release or waiver of any right or obligation under the Maryland Franchise Registration and Disclosure Law.
Item 5 of the Franchise Disclosure Document is supplemented by the following: Based upon the franchisor's financial condition, the Maryland Securities Commissioner has required a financial assurance. Therefore, all initial fees and payments owed by franchisees shall be deferred until the franchisor completes its pre-opening obligations under the franchise agreement. "In addition, all development fees and initial payments by area developers shall be deferred until the first franchise under the development agreement opens.
Item 17 of the Franchise Disclosure Document is amended by adding the following: The provision in 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.).
Item 17 of the Franchise Disclosure Document and Article 17 of the Franchise Agreement are amended by adding: any claims arising under the Maryland Franchise Registration and Disclosure Law must be brought within 3 years after the grant of the franchise.
Article 17 of the Franchise Agreement is amended to provide as follows: Any lawsuit permitted under this Article shall be brought in the federal or state courts located in the State of Maryland. Item 17 is hereby amended by adding the identical language in the "summary" column of line v.
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, the Maryland Amendment supplements multiple items within the Franchise Agreement and Franchise Disclosure Document. Specifically, Item 5 of the Franchise Disclosure Document is supplemented to address financial assurances required by the Maryland Securities Commissioner due to the franchisor's financial condition. This results in the deferral of initial fees and payments from franchisees until Degree Wellness completes its pre-opening obligations. Additionally, development fees and initial payments by area developers are deferred until the first franchise under the development agreement opens.
Furthermore, Item 17 of the Franchise Disclosure Document is amended to include a provision that any claims arising under the Maryland Franchise Registration and Disclosure Law must be brought within three years after the grant of the franchise. Article 17 of the Franchise Agreement is also amended, stipulating that any permitted lawsuit must be brought in federal or state courts located in Maryland.
Additionally, the Franchise Agreement and Franchise Disclosure Document are amended to ensure that no release, assignment, novation, waiver, or estoppel is required if it would violate Maryland Franchise Registration and Disclosure Law. The amendment clarifies that nothing in the franchise agreement, including acknowledgments or representations, shall be deemed a release or waiver of any right or obligation under the Maryland Franchise Registration and Disclosure Law. This provision aims to protect the franchisee's rights under Maryland law, ensuring compliance and preventing unintentional waivers of legal protections.
Moreover, a section is added to ensure that the franchisee retains all rights as provided in Section 14-216(c)(25) of the Maryland Franchise Registration and Disclosure Law, including the right to submit matters to the jurisdiction of the Courts of Maryland. The amendment also addresses potential conflicts between the agreement's arbitration provisions and Maryland law, acknowledging disputes regarding the enforceability of forum selection requirements in light of the Federal Arbitration Act.