What Maryland law necessitates the amendment to the Pearce Bespoke Franchise Agreement?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to the 2025 Pearce Bespoke Franchise Disclosure Document, the Maryland Franchise Registration and Disclosure Law, specifically Md. Code Ann., Bus. Reg. § 14-201 et seq., and its associated rules and regulations, necessitates amendments to the franchise agreement for franchisees in Maryland. This law aims to protect franchisees by ensuring certain provisions within franchise documents align with Maryland's franchise regulations.
Several key areas are addressed by these amendments. Firstly, any requirement for a franchisee to agree to a release, assignment, novation, estoppel, or waiver of liability as a condition of purchasing a Pearce Bespoke franchise cannot act as a release of liability under Maryland Franchise Law. Secondly, Item 17 of the franchise agreement is amended to clarify that claims arising under Maryland Franchise Law must be brought within three years, general releases required for renewal or transfer do not apply to liabilities under Maryland Franchise Law, Pearce Bespoke's right to terminate based on bankruptcy may not be enforceable under federal law, and franchisees retain the right to file lawsuits in Maryland courts regarding causes of action under Maryland Franchise Law.
These amendments ensure that Pearce Bespoke franchisees in Maryland are not subjected to terms that waive their rights or protections under Maryland law. The FDD also clarifies that the registration of the franchise disclosure document does not constitute an endorsement by the Maryland Securities Commissioner. This means prospective franchisees must still conduct their own due diligence and seek legal counsel to fully understand their rights and obligations under the franchise agreement and Maryland law.