What was the case number for the administrative proceeding involving a Dryer Vent Squad affiliate before the Securities Commissioner of Maryland?
Dryer_Vent_Squad Franchise · 2024 FDDAnswer from 2024 FDD Document
In the Matter of Frost Shades, LLC, Administrative Proceeding before the Securities Commissioner of Maryland, Case No. 2021-0171. As a result of an investigation into the franchise related activities of our affiliate, Frost Shades, LLC ("Frost Shades"), the Maryland Securities Commissioner ("Commissioner") concluded that grounds existed to allege that Frost Shades violated the registration and disclosure provisions of the Maryland Franchise Law in relation to the offer and sale of a Frost Shades franchise. Frost Shades acknowledged that, during the time it was not registered to offer and sell franchises in Maryland, it entered into a franchise agreement in Maryland that the Commissioner concluded constituted the sale of a franchise. On December 10, 2021, the Commissioner and Frost Shades entered into a consent order whereby Frost Shades agreed to: immediately and permanently cease and desist from the offer and sale of franchises in violation of the Maryland Franchise Law; file and pursue an amendment to its Maryland registration, which shall include updated disclosures; and offer rescission to the franchisee who was sold a franchise in Maryland while Frost Shades was not registered with the State.
Source: Item 3 — LITIGATION (FDD pages 11–15)
What This Means (2024 FDD)
According to Dryer Vent Squad's 2024 Franchise Disclosure Document, an administrative proceeding occurred before the Securities Commissioner of Maryland involving Frost Shades, LLC, which is identified as an affiliate of Dryer Vent Squad. The case number for this proceeding was 2021-0171.
The proceeding arose from an investigation into Frost Shades' franchise-related activities. The Maryland Securities Commissioner concluded that Frost Shades violated Maryland Franchise Law's registration and disclosure provisions regarding franchise offers and sales. Specifically, Frost Shades entered into a franchise agreement in Maryland while not registered to offer franchises in the state, which the Commissioner deemed a franchise sale.
To resolve the matter, on December 10, 2021, Frost Shades and the Commissioner entered into a consent order. Frost Shades agreed to cease offering and selling franchises in violation of Maryland Franchise Law immediately and permanently. Additionally, Frost Shades was required to file an amendment to its Maryland registration with updated disclosures and offer rescission to the franchisee who purchased a franchise while Frost Shades was not properly registered in Maryland.