For Ledgers franchises in Maryland, can a franchisee be required to waive their right to file a lawsuit in Maryland claiming a violation of the Maryland Franchise Law?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
nd Section 1.2.B of the FA is modified to also provide,
- "The general release required as a condition of renewal, sale, and/or assignment/transfer shall not apply to any liability under the Maryland Franchise Registration and Disclosure Law.
- B. Item 17.u. of the FDD and Section 9.2E of the FA is modified to also provide,
- "This Franchise Agreement provides that disputes are resolved through arbitration. A Maryland franchise regulation states that it is an unfair or deceptive practice to require a franchisee to waive its right to file a lawsuit in Maryland claiming a violation of the Maryland Franchise Law. In light of the Federal Arbitration Act, there is some dispute as to whether this forum selection requirement is legally enforceable."
- C. Item 17.v. of the FDD and Section 9.5A of the FA is modified to also provide,
- "Any claims arising under the Maryland Franchise Registration and Disclosure Law must be brought within 3 years after the grant of the franchise."
- D. Item 5 of the FDD and Section 2.1 of the FA are modified with the addition of the following language:
- "Based upon the franchisor'
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to Ledgers' 2025 Franchise Disclosure Document, a Maryland franchise regulation states that it is an unfair or deceptive practice to require a franchisee to waive its right to file a lawsuit in Maryland claiming a violation of the Maryland Franchise Law. However, the FDD also notes that there is some dispute as to whether this forum selection requirement is legally enforceable, in light of the Federal Arbitration Act. This suggests that while Maryland law aims to protect franchisees' rights to sue for violations of franchise law, the enforceability of this protection may be contested due to federal law favoring arbitration.
Furthermore, the Ledgers FDD explicitly states that all representations requiring prospective franchisees to assent to a release, estoppel, 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. This provision reinforces the intent to prevent franchisees from unintentionally waiving their rights under Maryland franchise law through standard agreements or questionnaires.
In practical terms, this means that Ledgers franchisees in Maryland should be aware that while the franchise agreement may contain clauses that appear to limit their ability to sue, these clauses may not be fully enforceable regarding claims related to Maryland franchise law. Franchisees should consult with legal counsel to understand their rights and the implications of any waivers or releases they are asked to sign. Ledgers franchisees should also be aware that any claims arising under the Maryland Franchise Registration and Disclosure Law must be brought within 3 years after the grant of the franchise.