In Maryland, does the general release required for renewal, sale, or assignment/transfer apply to liability under the Maryland Franchise Registration and Disclosure Law for a Southern Steer franchise?

MARYLAND

ITEM 5 of the Franchise Disclosure Document and sections of the Franchise Agreement and Multi-Unit Development Agreement are revised as follows:

Based upon the franchisor's financial condition, the Maryland Securities Commissioner has required a financial assurance. Therefore, all initial fees and payments owed by franchisees shall be deferred until the franchisor completes its pre-opening obligations under the franchise agreement. In addition, all development fees and initial payments by multi-unit developers shall be deferred until the first franchise under the multi-unit development agreement opens.

ITEM 17 of the Franchise Disclosure Document, the Franchise Agreement and the Multi-Unit Development Agreement are amended to state:

The general release required as a condition of renewal, sale, and/or assignment/transfer shall not apply to any liability under the Maryland Franchise Registration and Disclosure Law.

ITEM 17 of the Franchise Disclosure Document, the Franchise Agreement and Multi-Unit Development Agreement is amended to add the following:

The Franchise Agreement and Multi-Unit Development 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.

The following sentence is added to the end of Section 28 of the Franchise Agreement and Section 19 of the Multi-Unit Development Agreement:

"Provided, however, that this provision is not limited to, nor shall it act as a release, estoppel or waiver of any liability incurred under the Maryland Franchise Registration and Disclosure Laws."

ITEM 17 of the Franchise Disclosure Document is hereby amended to the extent required under the Maryland Franchise Registration and Disclosure Laws.

The Franchise Agreement and Multi-Unit Development Agreement provides for termination upon bankruptcy. This provision may not be enforceable under Federal Bankruptcy Law (11 U.S.C.A. Sec. 101 et seq.).

If the franchise is located in or if franchisee is a resident of Maryland, then the designated provision in the Franchise Agreement will be amended as follows:

Source: Item 5 — and 7 of the FDD, Section 3.1 of the Franchise Agreement and Section 4.1 of the Multi-Unit Development Agreement are hereby amended to state that payment of the initial franchise fee and development fee will be deferred until We have satisfied Our pre-opening obligations, and You have commenced business operations. (FDD pages 168–290)