What is the specific name of the Maryland law that the Ledgers franchise agreement modifications address?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
MARYLAND
As to franchises governed by the Maryland Franchise Registration and Disclosure Law, if any of the terms of the Disclosure Document (FDD) or Franchise Agreement (FA) are inconsistent with the terms below, the terms below control.
- A. Item 17.b. of the FDD and 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's financial condition, the Maryland Securities Commissioner has required a financial assurance. Therefore, all initial fees and payments owed by franchisees shall be deferred until the franchisor completes its pre-opening obligations under the franchise agreement. "
- E. The provision in the franchise agreement which provides for termination upon bankruptcy of the franchisee may not be enforceable under the federal bankruptcy law (11 U.S.C. Section 1010 et seq.).
- F. The FA and the Franchisee Questionnaire are amended with the addition of the following language:
- "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."
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to Ledgers' 2025 Franchise Disclosure Document, the modifications to the franchise agreement for franchisees operating in Maryland address the Maryland Franchise Registration and Disclosure Law. Specifically, if any terms in the FDD or Franchise Agreement are inconsistent with this law, the terms of the law will take precedence.
Several sections of the FDD and Franchise Agreement are modified to ensure compliance with the Maryland Franchise Registration and Disclosure Law. For example, the general release required for renewal, sale, or transfer of the franchise does not apply to liabilities under the Maryland law. Additionally, any claims arising under this Maryland law must be brought within 3 years after the franchise is granted.
Furthermore, the FDD indicates that the Maryland Securities Commissioner requires a financial assurance based on Ledgers' financial condition. As a result, all initial fees and payments owed by franchisees in Maryland are deferred until Ledgers completes its pre-opening obligations under the franchise agreement. The Franchise Agreement and Franchisee Questionnaire are also amended to ensure that representations requiring franchisees to release, waive, or estop liabilities do not apply to liabilities incurred under the Maryland Franchise Registration and Disclosure Law.
These modifications are important for prospective Ledgers franchisees in Maryland as they provide additional protections and ensure compliance with state-specific franchise regulations. Franchisees should carefully review these modifications and understand their rights and obligations under Maryland law.