After entering into a Mr. Sandless franchise agreement, is a franchisee precluded from settling claims?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
es not decided by arbitration may be brought in a court of competent jurisdiction. The law of the Commonwealth of Pennsylvania governs the arbitration. However, pursuant to Section 14-216(c)(25) of the Maryland Franchise Registration and Disclosure Law, a franchisee is permitted to enter into litigation with the Franchisor in the State of Maryland, regardless of the language in the Franchise Agreement.
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- The franchise agreement is hereby amended to provide that the acknowledgements or representations of the franchisee which disclaim the occurrence and/or acknowledge the non-occurrence of acts that would constitute a violation of the Franchise Law 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.
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- The first sentence of paragarph "E" beginning with "You acknowledge..", under the section titled "Background" of the Franchise Agreement, is hereby deleted in its entirety.
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- Sections 27.1 through 27.5 of the Franchise Agreement are hereby deleted.
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- To the extent of any inconsistencies, Item 5 and Section 10.1 of the Franchise Agreement are hereby amended to further state:
"Based upon Franchisor's financial condition, the Maryland Securities Commissioner has required a financial assurance. Therefore, Franchisor will defer collection of the Initial Franchise Fee and other initial fees payable to Franchisor until Franchisor has fulfilled its initial pre-opening obligations."
No statement, questionnaire, or acknowledgment signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise.
MR. SANDLESS FRANCHISE LLC By: Name: Title: FRANCHISEE:
DISCLOSURE REQUIRED BY THE STATE OF MICHIGAN
THE STATE OF MICHIGAN PROHIBITS CERTAIN UNFAIR PROVISIONS THAT ARE SOMETIMES IN FRANCHISE DOCUMENTS. IF ANY OF THE FOLLOWING PROVISIONS ARE IN THESE FRANCHISE DOCUMENTS, THE PROVISIONS ARE VOID AND CANNOT BE ENFORCED AGAINST YOU:
- (a) A prohibition on the right of a franchisee to join an association of franchises.
- (b) A requirement that a franchisee assent to a release, assignment, novation, waiver or estoppel which deprives a franchisee of rights and protections provided in this act. This shall not preclude a franchisee, after entering into a franchise agreement, from settling any and all claims.
- (c) A provision that permits a franchisor to terminate a franchise prior to the expiration of its term except for good cause.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 30–34)
What This Means (2025 FDD)
According to the 2025 Mr. Sandless Franchise Disclosure Document, a franchisee's ability to settle claims is subject to certain state-specific laws, particularly in Maryland and Virginia. In Maryland, the franchise agreement is amended to ensure that franchisee acknowledgements or representations do not act as a release, estoppel, or waiver of any liability incurred under the Maryland Franchise Registration and Disclosure Law. This means that franchisees in Maryland retain their rights under state franchise law, regardless of conflicting language in the franchise agreement. Additionally, any statement signed by a franchisee cannot waive claims under state franchise law, including fraud in the inducement, or disclaim reliance on statements made by Mr. Sandless.
In Virginia, the FDD is amended to comply with the Virginia Retail Franchising Act. Specifically, it is unlawful for Mr. Sandless to cancel a franchise without reasonable cause or to use undue influence to induce a franchisee to surrender any rights. Therefore, any provision in the franchise agreement that violates these protections may not be enforceable.
Furthermore, the Mr. Sandless FDD outlines dispute resolution procedures, stating that franchisees must first bring any dispute to the President of Mr. Sandless for discussion before involving a third party. At Mr. Sandless's option, claims must be submitted to mediation in Delaware County, Pennsylvania, although this is subject to state law. For disputes not resolved by mediation, litigation must occur in Delaware County, Pennsylvania, or the United States District Court for the Eastern District of Pennsylvania, again subject to state law. These state-specific addenda and dispute resolution processes ensure that franchisees retain certain rights and are not entirely precluded from settling claims, especially where state laws provide additional protections.