In Maryland, does the provision superseding other terms of any document executed in connection with the Learningrx franchise relate to waiving claims or disclaiming reliance?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
The franchise agreement provides for termination upon bankruptcy. This provision may not be enforceable under federal bankruptcy law (11 U.S.C.A. Sec. 101 et seq.). Item 17(h) of the Franchise Disclosure Document, Section 5.09 of the Franchise Agreement and Section 6.01 of the Area Developer Agreement are amended to add this provision.
Item 17(m) of the Franchise Disclosure Document, Section 14.04(b) of the Franchise Agreement and Section 7.03 of the Area Developer Agreement are amended to state that the 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.
Item 17(u)(v)(w) of the Franchise Disclosure Document, Sections 16.03 and 16.07 of the Franchise Agreement and Sections 10.01 & 10.02 of the Area Developer Agreement are amended to state; A franchisee may bring a lawsuit in Maryland for claims arising under the Maryland Franchise Registration and Disclosure Law.
Item 17(u) of the Franchise Disclosure Document, Section 16 of the Franchise Agreement and Section 10.01 of the Area Developer Agreement are amended to state: Any claims arising under the Maryland Franchise Registration and Disclosure Law must be brought within three years after the grant of the franchise.
Section 19 and Attachment VII of the Franchise Agreement and Section 14 of the Area Developer Agreement are amended to state: All representations requiring prospective franchisees to assent to a release, estoppels or waiver of liability are not intended to nor shall they act as a release, estoppel or waiver of any liability incurred under the Maryland Franchise Registration and Disclosure Law.
The Franchise Agreement is hereby amended to delete Sections 19.1 and 19.2 as the provisions violate the North American Securities Administrators Association Statement of Policy Regarding the Use of Franchise Questionnaires and Acknowledgments which has been adopted by the Maryland Office of the Attorney General, Securities Division.
The Attachment VII to the Franchise Agreement, Statement of Franchisee Questionnaire, is hereby deleted in its entirety.
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to Learningrx's 2025 Franchise Disclosure Document, the addendum for Maryland addresses specific provisions within the franchise agreement. It states that representations requiring prospective franchisees to agree to a release, estoppel, or waiver of liability will not act as a release, estoppel, or waiver of any liability incurred under the Maryland Franchise Registration and Disclosure Law. This means that while the standard franchise agreement might contain clauses that seem to limit Learningrx's liability, these clauses are superseded by Maryland law, which protects the franchisee's rights under the state's franchise regulations. This ensures that franchisees in Maryland retain their legal rights and recourse, regardless of what the standard agreement might imply.
Furthermore, the Learningrx FDD notes that the Franchise Agreement is amended to delete Sections 19.1 and 19.2, as these provisions violate the North American Securities Administrators Association Statement of Policy Regarding the Use of Franchise Questionnaires and Acknowledgments, which has been adopted by the Maryland Office of the Attorney General, Securities Division. Additionally, Attachment VII to the Franchise Agreement, the Statement of Franchisee Questionnaire, is deleted entirely. This indicates a proactive effort to comply with Maryland's franchise laws and regulations, specifically addressing concerns about potential waivers of liability or releases that could disadvantage the franchisee.
In practical terms, this means a Learningrx franchisee in Maryland is afforded greater protection under the law compared to franchisees in states without such specific addenda. The franchisee cannot inadvertently waive their rights or claims under Maryland franchise law through standard agreement clauses. This provides a level of assurance that the franchisee's legal standing is maintained, and they have the ability to pursue claims if necessary, despite any potentially conflicting language in the franchise agreement. This is a significant benefit for prospective franchisees in Maryland, as it reduces the risk of unknowingly forfeiting legal protections.