Does the Maryland amendment to the Pearce Bespoke Franchise Agreement affect franchisees outside of Maryland?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
ADDENDUM TO THE FRANCHISE DISCLOSURE DOCUMENT REQUIRED BY THE STATE OF MARYLAND
The Office of Attorney General for the State of Maryland requires that certain provisions contained in franchise documents be amended to be consistent with Maryland Franchise Registration and Disclosure Law, Md. Code Ann., Bus. Reg. § 14-201 et seq., and of the Rules and Regulations promulgated under the Act (collectively the "Maryland Franchise Law"). To the extent that this Disclosure Document or Franchise Agreement contains provisions that are inconsistent with the following, such provisions are hereby amended:
- No requirement that you agree to any release, assignment, novation, estoppel or waiver of liability as a condition to your purchasing a Pearce Bespoke franchise shall act as a release, estoppel or waiver of any liability under the Maryland Franchise Law.
2. Item 17 is amended to state:
- (a) Any claims arising under the Maryland Franchise Law must be brought within three (3) years after the grant of the franchise.
- (b) Any general release required by the terms and conditions of the Franchise Agreement as a condition of renewal, assignment or transfer shall not apply to any liability under the Maryland Franchise Law.
- (c) Our right to terminate you upon your bankruptcy may not be enforceable under federal bankruptcy law (11 U.S.C. §101 et. seq.).
- (d) 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.
THE REGISTRATION OF THIS FRANCHISE DISCLOSURE DOCUMENT WITH MARYLAND SECURITIES DIVISION OF THE OFFICE OF ATTORNEY GENERAL DOES NOT CONSTITUTE APPROVAL, RECOMMENDATION, OR ENDORSEMENT BY THE SECURITIES COMMISSIONER.
AMENDMENT TO THE PEARCE BESPOKE FRANCHISE AGREEMENT REQUIRED BY THE STATE OF MARYLAND
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:
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to the 2025 Pearce Bespoke Franchise Disclosure Document, the amendments to the franchise agreement required by Maryland law primarily affect franchisees operating within Maryland. The document includes specific addenda for Maryland, Rhode Island, Virginia, Washington, and Illinois, indicating that franchise agreements are tailored to comply with the franchise laws of each specific state. Each of these addenda includes language specifying that its provisions are effective only to the extent that the jurisdictional requirements of that state's franchise law are independently met. This suggests that the Maryland amendment is designed to ensure compliance with Maryland law and its direct impact is intended to be limited to Pearce Bespoke franchisees in Maryland.
However, there could be indirect effects on franchisees outside of Maryland. For instance, the Maryland amendment addresses issues such as releases of liability, termination upon bankruptcy, and the right to file lawsuits within Maryland courts. While these specific provisions are tailored to Maryland law, they may reflect Pearce Bespoke's general approach to these issues, which could inform how the franchise agreement is interpreted or enforced in other states. Additionally, if a franchisee in another state believes that Pearce Bespoke has acted in bad faith or violated the implied covenant of good faith and fair dealing, they might draw on the principles underlying the Maryland amendment to support their case, even though the specific provisions of the amendment would not directly apply.
It is also important to note that franchise laws vary significantly from state to state. Some states have comprehensive franchise laws that provide significant protections to franchisees, while others have little or no franchise-specific legislation. Therefore, a Pearce Bespoke franchisee should always consult with an attorney who is knowledgeable about franchise law in their specific state to understand their rights and obligations under the franchise agreement. While the Maryland amendment itself may not directly apply, the broader legal and regulatory landscape in each state will shape the franchisee's relationship with Pearce Bespoke.