What Are The Franchise Laws in Maryland?
Maryland franchising is governed by a direct registration and disclosure law, making it one of the more regulated states for franchisors. With that in mind, you do need to find Maryland Franchise Attorneys to help you understand the FDD and state laws.
Unlike states that only rely on federal rules, Maryland requires franchisors to register their Franchise Disclosure Document (FDD) with the Securities Division of the Attorney General’s office before they can offer or sell any franchises in the state.
This registration must be renewed annually, ensuring the state has up-to-date information. In this case, the state’s proactive approach means that a franchisor cannot legally even advertise a franchise opportunity in Maryland until the state has approved its registration.
While the registration requirement is strict, the law does provide for certain exemptions. The most significant exemption is for large, established franchisors.
To qualify, a franchisor must meet substantial net worth and experience requirements, such as having a high minimum net worth and a proven track record of operating a significant number of franchises for several years. This allows well-capitalized and experienced franchise systems to bypass the annual registration process, though they must still provide the FDD to prospective franchisees as required by federal law.
Beyond the initial sale, Maryland law also offers robust protections governing the ongoing relationship between a franchisor and a franchisee. The law mandates that a franchisor can only terminate a franchise agreement for “good cause,” preventing arbitrary cancellations.
Furthermore, if a franchisor violates the law in terminating the agreement, they may be required to repurchase the franchisee’s inventory. These relationship laws provide franchisees in Maryland with a level of security and legal recourse that is not available in many other states.
Here’s a list of franchise lawyers you can hire in Maryland
Harry M. Rifkin / Law Offices of Harry M. Rifkin
Glen Burnie, Maryland
David L. Cahn
Manning, Morris & Taylor, 10045 Baltimore National Pike, Suite A-5
Ellicott City, Maryland
Robert J. Kim / McNamee Hosea
6411 Ivy Lane, Suite 200
Greenbelt, Maryland
Aaron M. Berk / The Berk Law Firm, LLC
1201 Seven Locks Road, Suite 360
Rockville, Maryland
