In Maryland, is Mr. Sandless allowed to require a prospective franchisee to assent to a release of liability as a condition of purchasing a franchise?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
dition of renewal, sale, and/or assignment/transfer shall not apply to any liability under the Maryland Franchise Registration and Disclosure Law.
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- Section 14-226 of the Maryland Franchise Registration and Disclosure Law prohibits a franchisor from requiring a prospective franchisee to assent to any release, estoppel or waiver of liability as a condition of purchasing a franchise. Any disclaimer regarding the occurrence and/or acknowledgment of the non-occurrence of acts that would constitute a violation of the Franchise Law in order to purchase the franchise 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. The Franchisee Disclosure Acknowledgment Statement, Schedule F to the Franchise Agreement, is amended to comply with this provision.
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- The limitation on the period of time arbitration and/or litigation claims must be brought pursuant to Section 24.9 of the Franchise Agreement shall not act to reduce the 3 year statute of limitations afforded a franchisee for bringing a claim arising under the Maryland Franchise Registration and Disclosure Law.
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, Maryland law prohibits Mr. Sandless from requiring a prospective franchisee to sign a release of liability as a condition of purchasing a franchise. Specifically, Section 14-226 of the Maryland Franchise Registration and Disclosure Law states that Mr. Sandless cannot require a prospective franchisee to assent to any release, estoppel, or waiver of liability to purchase a Mr. Sandless franchise. The FDD states that any disclaimers regarding violations of the Franchise Law are not intended to act as a release, estoppel, or waiver of liability under the Maryland Franchise Registration and Disclosure Law.
To comply with this provision, Mr. Sandless has amended its Franchisee Disclosure Acknowledgment Statement, which is Schedule F to the Franchise Agreement. This amendment ensures that the acknowledgment statement aligns with Maryland law and does not include any prohibited releases or waivers of liability.
Furthermore, the FDD includes a State Addendum specifically for Maryland, which reinforces these protections. This addendum clarifies that the general release required for renewal or assignment/transfer of the franchise is not intended to act as a release, estoppel, or waiver of liability under Maryland law. This ensures that Mr. Sandless franchisees in Maryland retain their rights and protections under the state's franchise laws.