Does the Maryland Franchise Registration and Disclosure Law prevent a Management Recruiters franchisee from entering into litigation with Management Recruiters in Maryland under certain circumstances?

According to the 2024 Management Recruiters Franchise Disclosure Document, the Maryland Franchise Registration and Disclosure Law does not prevent a franchisee from entering into litigation with Management Recruiters in Maryland under certain circumstances. Specifically, while the Franchise Agreement may require franchisees to submit to court proceedings in South Carolina, this provision does not preclude a franchisee from litigating 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 Franchise Agreement itself. This suggests that certain disputes, as defined in the agreement, may still need to be resolved in South Carolina or through alternative dispute resolution methods like arbitration.

This addendum ensures that Maryland franchisees retain their rights under Maryland law, even if the standard Franchise Agreement points to South Carolina as the primary jurisdiction. Franchisees should carefully review the Franchise Agreement to understand which types of disputes are subject to its litigation terms and which can be pursued in Maryland courts under the protection of the Maryland Franchise Registration and Disclosure Law.