In Maryland, is the Degree Wellness franchise agreement provision for termination upon bankruptcy of the franchisee always enforceable?

According to Degree Wellness's 2025 Franchise Disclosure Document, the provision in the franchise agreement that allows for termination upon the franchisee's bankruptcy may not be enforceable under federal bankruptcy law. This is clarified by an amendment to Item 17 of the FDD specific to Maryland franchisees.

This means that while the Degree Wellness franchise agreement might state that bankruptcy is grounds for termination, federal law could override this provision, potentially preventing Degree Wellness from terminating the agreement solely due to the franchisee's bankruptcy. This protection is afforded by 11 U.S.C. Section 101, et. seq., which governs federal bankruptcy law.

For a prospective Degree Wellness franchisee in Maryland, this amendment offers a degree of protection. It suggests that in the event of financial distress leading to bankruptcy, the franchisee may have legal recourse to prevent the termination of their franchise agreement. However, it is important to note that the FDD language indicates the provision "may not" be enforceable, suggesting that enforceability will depend on the specific circumstances and interpretation of federal law at the time.