Does the Zoomin Groomin franchise agreement require disputes to be resolved through arbitration in Maryland?
Zoomin_Groomin Franchise · 2025 FDDAnswer from 2025 FDD Document
As to franchises governed by the Maryland Franchise Registration and Disclosure Law, if any of the terms of the Disclosure Document are inconsistent with the terms below, the terms below control.
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- Item 17.u. is modified to also provide, "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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- Item 17.v. is modified to also provide, "Any claims arising under the Maryland Franchise Registration and Disclosure Law must be brought within 3 years after the grant of the franchise."
Source: Item 17 — g. of the Disclosure Document is modified to state that, in addition to the grounds for immediate termination specified in Item 17.h., the franchisor can terminate upon written notice and a 60 day opportunity to cure for a breach of the Franchise Agreement. (FDD pages 51–65)
What This Means (2025 FDD)
According to Zoomin Groomin's 2025 Franchise Disclosure Document, the franchise agreement stipulates that disputes are resolved through arbitration. However, for franchises governed by the Maryland Franchise Registration and Disclosure Law, there's a modification to this clause. Maryland franchise regulations consider it an unfair or deceptive practice to mandate a franchisee to waive their right to file a lawsuit in Maryland, especially concerning violations of Maryland Franchise Law.
Given the Federal Arbitration Act, there's some legal ambiguity about whether the forum selection requirement is fully enforceable. This means that while the Zoomin Groomin franchise agreement generally favors arbitration, a Maryland franchisee's right to pursue a lawsuit in Maryland under specific circumstances is a contested issue.
Prospective Zoomin Groomin franchisees in Maryland should be aware of this potential conflict and seek legal counsel to understand their rights fully. They should also note that any claims arising under the Maryland Franchise Registration and Disclosure Law must be brought within 3 years after the grant of the franchise. This addendum aims to protect franchisees from unknowingly waiving their rights under Maryland law, ensuring they have recourse for violations, despite the standard arbitration clause.