What effect do statements, questionnaires, or acknowledgments signed by an Even Hotels franchisee have on waiving claims under Maryland franchise law, including fraud in the inducement?
Even_Hotels Franchise · 2025 FDDAnswer from 2025 FDD Document
Pursuant to the Interpretive Opinion "Adopting NASAA Statement of Policy Regarding the Use of Franchise Questionnaires and Acknowledgments" dated January 23, 2023 (the "Interpretive Opinion"), issued by the State of Maryland Office of the Attorney General Securities Division (the "Division"), the Division requires franchisors selling franchises that are subject to the Maryland Franchise Registration and Disclosure Law to include the following statement in their franchise agreements: "No statement, questionnaire, or acknowledgment 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 any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise." Accordingly, any statement, questionnaire, or acknowledgment in the License Agreement that is not permitted under the Interpretive Opinion is deleted in its entirety and shall have no force or effect.
Source: Item 23 — RECEIPTS (FDD pages 99–438)
What This Means (2025 FDD)
According to Even Hotels' 2025 Franchise Disclosure Document, specific stipulations are in place to protect franchisees in Maryland regarding waivers of claims. The FDD states that any statement, questionnaire, or acknowledgment signed by an Even Hotels franchisee related to the start of the franchise relationship will not waive claims under Maryland franchise law. This explicitly includes claims related to fraud in the inducement. This means that Even Hotels franchisees in Maryland cannot unknowingly or unintentionally give up their rights to pursue legal claims against the franchisor based on misrepresentations or violations of Maryland franchise law.
This protection is highlighted in an Interpretive Opinion issued by the State of Maryland Office of the Attorney General Securities Division on January 23, 2023. This opinion requires franchisors like Even Hotels to include a specific statement in their franchise agreements to ensure franchisees are aware that they are not waiving their rights. The FDD emphasizes that this provision overrides any other conflicting terms in any document signed in connection with the franchise agreement.
For a prospective Even Hotels franchisee in Maryland, this is a significant safeguard. It ensures that they retain their legal rights under Maryland franchise law, even after signing various documents during the franchise commencement. This protection extends to claims of fraud, meaning that if the franchisee believes they were misled into signing the agreement, they can still pursue legal action. This addendum provides additional security and reinforces the franchisee's rights within the legal framework of Maryland franchise law.