To what extent is each provision of the Maryland Addendum effective for a Punch King Fitness franchise?
Punch_King_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
MARYLAND ADDENDUM TO FRANCHISE AGREEMENT AND AREA DEVELOPMENT AGREEMENT
The Franchise Agreement and Area Development Agreement to which this addendum is attached are amended as follows to comply with the Maryland Franchise Registration and Disclosure Law:
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- A franchisee may bring a lawsuit in Maryland for claims arising under the Maryland Franchise Registration and Disclosure Law.
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- This franchise agreement provides that disputes are resolved through arbitration. A Maryland franchise regulation states that it is an unfair or deceptive practice to require a franchisee to waive its right to file a lawsuit in Maryland claiming a violation of the Maryland Franchise Law. In light of the Federal Arbitration Act, there is some dispute as to whether this forum selection requirement is legally enforceable.
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- Any claims arising under the Maryland Franchise Registration and Disclosure Law must be brought within 3 years after the grant of the franchise.
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- All representations requiring prospective franchisees to assent to a release, estoppel, or waiver of liability are not intended to nor shall they act as a release, estoppel, or waiver of any liability incurred under the Maryland Franchise Registration and Disclosure Law.
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- Each provision of this Addendum is effective only to the extent that the jurisdictional requirements of the Maryland Franchise Registration and Disclosure Law are met independently of this addendum. To the extent, this addendum is inconsistent with any term or condition of the Franchise Agreement or its exhibits or attachments, the terms of this Addendum control. Franchisor and Franchisee hereby ratify and affirm the Franchise Agreement in all other respects.
Source: Item 22 — CONTRACTS (FDD pages 56–215)
What This Means (2024 FDD)
According to Punch King Fitness's 2024 Franchise Disclosure Document, the Maryland Addendum modifies the franchise and area development agreements to comply with Maryland law. The addendum includes several provisions that impact the enforceability and interpretation of the franchise agreement within Maryland.
Specifically, a Punch King Fitness franchisee in Maryland has the right to sue the franchisor in Maryland for claims arising under the Maryland Franchise Registration and Disclosure Law. The addendum addresses the enforceability of arbitration clauses, noting a dispute over whether requiring franchisees to waive their right to sue in Maryland is legally enforceable due to the Federal Arbitration Act. It also clarifies that any claims under the Maryland Franchise Registration and Disclosure Law must be brought within 3 years after the franchise is granted.
Furthermore, the addendum states that representations requiring franchisees to release, estop, or waive liability do not apply to liabilities incurred under Maryland franchise law. Each provision of the addendum is effective only to the extent that the jurisdictional requirements of Maryland franchise law are independently met. In case of inconsistencies between the addendum and the franchise agreement, the terms of the addendum will take precedence, while the rest of the franchise agreement remains in effect.