In Maryland, does the Franchise Agreement provision requiring franchisees to submit to court proceedings in South Carolina preclude a Management Recruiters franchisee from entering into litigation with Management Recruiters in Maryland?

According to Management Recruiters's 2024 Franchise Disclosure Document, the standard franchise agreement requires franchisees to submit to court proceedings in South Carolina under certain circumstances. However, an addendum to the disclosure document for Maryland franchisees addresses this issue directly.

The addendum states that the South Carolina venue provisions may conflict with Maryland's Franchise Registration and Disclosure Law. Therefore, franchisees in Maryland are not precluded from entering into litigation with Management Recruiters in Maryland.

However, this ability to litigate in Maryland is conditional. The nature of the litigation must not be the type of dispute, controversy, claim, action, or proceeding that would be subject to litigation under the standard Franchise Agreement. This suggests that certain types of disputes may still be required to be litigated in South Carolina, while others can be pursued in Maryland, so a franchisee should seek legal counsel to determine the proper venue.

This addendum ensures that Maryland franchisees retain certain rights under Maryland law, despite conflicting provisions in the standard franchise agreement. It is important for prospective franchisees to carefully review all addenda and understand how they modify the standard agreement within their specific state.