What is the intent of the non-waiver provision related to the Maryland Franchise Registration and Disclosure Law in the Mrcool Franchise Agreement's Article 14.C(6)?
Mrcool Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Article 14.C of the Franchise Agreement, under the heading "Conditions for Approval of Transfer," subarticle 14.C(6) is supplemented with the addition of the following language:
- ; provided, however, that all rights and causes of action arising in favor of Franchisee from the provisions of the Maryland Franchise Registration and Disclosure Law and the regulations issued thereunder, shall remain in force; it being the intent of this provision that the non-waiver provisions of the Maryland Franchise Registration and Disclosure Law be satisfied.
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- Article 15.B. of the Franchise Agreement, under the heading "Conditions for Renewal," the subarticle 15.B(8) is supplemented with the addition of the following language:
- ; provided, however, that all rights and causes of action arising in favor of Franchisee from the provisions of the Maryland Franchise Registration and Disclosure Law and the regulations issued thereunder, shall remain in force; it being the intent of this provision that the non-waiver provisions of the Maryland Franchise Registration and Disclosure Law be satisfied.
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- Article 18.G. of the Franchise Agreement and, if Franchisee executes a Development Agreement, Section 7.6 of the Development Agreement, under the heading "Choice of Law, Non-Binding Mediation, Binding Arbitration, and Consent to Jurisdiction," shall be amended by the addition of the following statement added to Article 18.G. of the Franchise Agreement and Section 7.6 of the Development Agreement:
- A franchisee may bring a lawsuit in Maryland for claims arising under the Maryland Franchise Registration and Disclosure Law.
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- Article 18.I. of the Franchise Agreement and, if Franchisee executes a Development Agreement, Section 7.8 of the Development Agreement, under the heading "Limitations of Claims," shall be amended by the addition of the following statement added to Article 18.I. of the Franchise Agreement and Section 7.8 of the Development Agreement:
Any claims arising under the Maryland Franchise Registration and Disclosure Law must be brought within three years after the grant of the franchise.
Source: Item 23 — RECEIPTS (FDD pages 55–263)
What This Means (2025 FDD)
According to Mrcool's 2025 Franchise Disclosure Document, Article 14.C(6) of the Franchise Agreement, which addresses "Conditions for Approval of Transfer," is supplemented to ensure that all rights and causes of action arising in favor of the franchisee under the Maryland Franchise Registration and Disclosure Law remain in effect. The explicit intent is to comply with the non-waiver provisions of the Maryland Franchise Registration and Disclosure Law. This means Mrcool cannot enforce any clause that would force a franchisee to surrender their rights under Maryland franchise law.
This provision is further reinforced in Article 15.B, concerning "Conditions for Renewal," where similar language is added to subarticle 15.B(8) to preserve the franchisee's rights and causes of action under Maryland law. Additionally, Article 18.G of the Franchise Agreement and Section 7.6 of the Development Agreement are amended to explicitly state that a franchisee can bring a lawsuit in Maryland for claims arising under the Maryland Franchise Registration and Disclosure Law.
Moreover, Article 18.I of the Franchise Agreement and Section 7.8 of the Development Agreement clarify that any claims under the Maryland Franchise Registration and Disclosure Law must be brought within three years after the franchise is granted. This amendment ensures that franchisees are aware of the time limit for filing such claims. The inclusion of these amendments underscores Mrcool's intent to adhere to Maryland franchise law and protect the franchisee's rights within that jurisdiction.
These stipulations collectively mean that Mrcool franchisees in Maryland retain all rights granted to them by Maryland law, even within the context of the franchise agreement's transfer, renewal, or dispute resolution clauses. This is a beneficial provision for prospective franchisees in Maryland, as it prevents Mrcool from inadvertently or intentionally overriding state law protections.