Does the Pearce Bespoke Area Development Agreement contain any provisions inconsistent with the Maryland Franchise Registration and Disclosure Law regarding release of liability?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
LAND**
In recognition of the requirements of the Maryland Franchise Registration and Disclosure Law, Md. Code Ann., Bus. Reg. § 14-201 et seq., and of the Rules and Regulations promulgated thereunder, the parties to the attached Pearce Bespoke Franchise Agreement (the "Franchise Agreement") agree as follows:
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- The Maryland Franchise Registration and Disclosure Law prohibits a franchisor from requiring a franchisee's assent to a release of liability under that Law as a condition for the sale, renewal, assignment or transfer of the franchise. To the extent of any inconsistencies with the Maryland Franchise Registration and Disclosure Law contained in this Disclosure Document or the Franchise Agreement, such inconsistent provisions are hereby deleted.
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- To the extent of any inconsistencies, the Franchise Agreement is hereby amended to further state:
- "Our right to terminate you upon your bankruptcy, however, may not be enforceable under federal bankruptcy law (11 U.S.C. §101 et. seq.)."
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- To the extent of any inconsistencies, the Franchise Agreement is hereby amended to further state:
- "Nothing herein shall waive your right to file a lawsuit alleging a cause of action arising under the Maryland Franchise Law in any court of competent jurisdiction in the State of Maryland."
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Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to the 2025 Pearce Bespoke Franchise Disclosure Document, the Area Development Agreement contains provisions that may be inconsistent with the Maryland Franchise Registration and Disclosure Law. To address this, the FDD includes an amendment stating that any such inconsistencies are deleted to comply with Maryland law. This means Pearce Bespoke cannot require a franchisee to sign a release of liability under Maryland law as a condition for the sale, renewal, assignment, or transfer of the franchise.
Specifically, the Pearce Bespoke FDD clarifies that any representations requiring prospective franchisees to agree to a release, estoppel, or waiver of liability will not act as a release, estoppel, or waiver of any liability incurred under the Maryland Franchise Registration and Disclosure Law. Furthermore, the FDD states that nothing within the agreement waives the franchisee's right to file a lawsuit alleging a cause of action arising under the Maryland Franchise Law in a competent Maryland court. The FDD also specifies that any claims arising under the Maryland Franchise Law must be brought within three years after the franchise is granted.
For a prospective Pearce Bespoke franchisee in Maryland, this amendment provides additional protection by ensuring their rights under Maryland franchise law are not compromised by standard agreement terms. It also ensures that franchisees can pursue legal action within the state if necessary, within the specified timeframe. This type of amendment is common in franchise agreements to ensure compliance with state-specific franchise laws, which vary considerably.