Maryland Franchise Law

Posted on January 25, 2011 by franchise lawyer Charles Internicola

Registration Status:
Franchise Registration State

Relevant State Franchise Law(s):
Maryland Franchise Law. Also refer to the FTC Franchise Rule.

Relevant Registration Entity:
Maryland Attorney General

Useful Links:
Maryland Attorney General and the Comptroller of Maryland

Statutes Relevant to Maryland Franchise Law:

Statute 02.02.08.01 - Definitions

Statute 02.02.08.02 - Franchise

Statute 02.02.08.03 – Franchise Fee

Statute 02.02.08.04 – Application for Registration

Statute 02.02.08.05 – Initial Registration

Statute 02.02.08.06 – Amendment of Registration

Statute 02.02.08.07 – Renewal of Registration

Statute 02.02.08.08 – Escrow Condition

Statute 02.02.08.09 – Advertising

Statute 02.02.08.10 - Exemptions

Statute 02.02.08.11 – Exemptions Form F-1

Statute 02.02.08.12 – Denial Suspension or Revocation of Registration or Exemption

Statute 02.02.08.13 – Financial Statements

Statute 02.02.08.14 – Reports by Registrants

Statute 02.02.08.15 – Franchisor Record

Statute 02.02.08.16 – Fraudulent and Prohibited Practices

Statute 02.02.08.17 – Interpretive Opinions

Statute 02.02.08.18 – Internet Offers

 

 

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Buying a Franchise: Some Factors to Consider about your Business Lease

Posted on May 28, 2009 by franchise lawyer Charles Internicola

When purchasing a business or franchise, your lease agreement will serve as one of the most influential factors in determining the profitability of your new business.  In states such as New York and New Jersey where rents are higher, paying particular attention to your rent factor is critical.

When the business that you are purchasing is a franchise, some additional lease agreement "due diligence" factors that you should consider, include:

 

  • Is the Lease a Sublease. Whether or not the lease for the business premises is transferred to you directly (as the purchaser of the business and the new franchisee) or if the lease is held by the franchisor (as the direct tenant) and then to you, indirectly, as a subtenant. This is important because in instances where the franchisor has direct control of the lease, it is possible – if you breach or terminate the franchise agreement – for the franchisor to attempt to “step in” and take over the operations of the business that you are purchasing. Again, this concern only comes about in instances where you breach the terms of the franchise agreement;
  • Is there a Lease Management Fee. Whether or not the franchisor charges a monthly lease management fee. This applies mostly in instances involving the franchisor’s sublease of the business location and constitutes, typically, an administrative monthly fee charged to you by the franchisor for being identified as the direct tenant on the lease;
  • Restricted Lease Use Clause. Whether or not the leased business location may be converted to a non-franchised business location in the event of a termination of the franchise agreement; and
  • Protected Territory. Whether or not the franchise agreement includes a protected territory (i.e., a specified geographic radius or map located within a certain proximity to the business location) within which the franchisor will not sell any additional franchises.

Your lease will serve as one of the most critical business assets that you will be acquiring, so you must get the terms right.  If the business that you are purchasing is a car wash or gas station in New York, Long Island or New Jersey your lease agreement due diligence must also include an assessment of the property for potential environmental conditions.

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