Does the Maryland amendment provide any exceptions to the standard termination procedures outlined in the Pearce Bespoke Area Development Agreement?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
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- To the extent of any inconsistencies, Area Development 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 Area Development 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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- To the extent of any inconsistencies, the Area Development Agreement is hereby amended to further state:
- "Any claims arising under the Maryland Franchise Law must be brought within three (3) years after the grant of the franchise."
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to the 2025 Pearce Bespoke FDD, the Maryland amendment does provide some exceptions and clarifications to the standard termination procedures outlined in the Area Development Agreement. Specifically, the amendment addresses the enforceability of termination upon franchisee bankruptcy, the franchisee's right to file lawsuits under Maryland Franchise Law, and the statute of limitations for claims arising under Maryland Franchise Law.
The amendment states that Pearce Bespoke's right to terminate a franchisee upon bankruptcy may not be enforceable under federal bankruptcy law. This means that federal law might override the standard termination clause in the Area Development Agreement under certain bankruptcy scenarios. Additionally, the amendment clarifies that franchisees retain the right to file lawsuits alleging causes of action under the Maryland Franchise Law in Maryland courts, regardless of any provisions in the Area Development Agreement.
Furthermore, any claims arising under the Maryland Franchise Law must be brought within three years after the grant of the franchise. This sets a specific time limit for legal actions related to Maryland franchise law, which could differ from the general statute of limitations applicable to other types of claims. These amendments aim to align the Area Development Agreement with the Maryland Franchise Registration and Disclosure Law, providing additional protections and clarity for franchisees operating in Maryland.