Maryland has amended its Maryland Franchise Registration and Disclosure Law, with all changes coming into effect on October 1, 2026, reshaping obligations for franchisors operating in the state.
Franchisors registered in Maryland or otherwise offering franchises subject to Maryland law should take immediate steps to ensure their operations are fully compliant with the updated rules.
One of the most significant changes extends the enforcement window available to regulators, with the Maryland Securities Commissioner now able to bring enforcement actions for up to five years after a violation occurs, increased from the previous three-year limit.
This extended enforcement authority represents a meaningful shift in regulatory risk for franchisors, who must now consider a longer exposure window when assessing potential compliance failures.
The statute of limitations for private civil actions brought by franchisees has also been restructured, now running to the earlier of four years after the franchise is granted or two years after the franchised business opens to the public.
A jurisdictional clarification further tightens the scope of these private civil action provisions, which now apply only to franchisees who are Maryland residents or whose franchised business operates, or will operate, in the state.
The amendments also introduce a statutory right for franchisees to join and participate in trade associations composed of franchisees of the same brand for any lawful purpose, a right franchisors are expressly prohibited from restricting or inhibiting.
Franchisees have been granted a private right of action for any violations of this new associational right, adding another layer of legal exposure for franchisors who attempt to limit franchisee participation in such groups.
The FDD Renewal Fast-Track Review Pilot Program, which was introduced during the 2026 renewal cycle, has now been formally established by statute, providing a codified mechanism for streamlining the renewal process going forward.
On compliance, registered franchisors are not required to file an amendment or cease offering franchises solely to reflect these legislative changes, according to the updated guidance.
However, beginning October 1, 2026, franchisors must use franchise disclosure documents and franchise agreements that have been updated to reflect the amendments when offering or selling franchises in Maryland.
The Securities Division will review compliance with the new requirements at each franchisor’s next amendment or renewal filing, meaning scrutiny of updated materials will come in due course for all registered franchisors.
Franchisors are required to include a specific verbatim disclosure in the FDD, Maryland addendum, or other appropriate documents, reading: “Any claims arising under the Maryland Franchise Registration and Disclosure Law must be brought by the earlier of: (i) four (4) years after the franchise is granted; or (ii) two (2) years after the date the franchise opened to the public.”
Franchisors should review and update their FDDs, franchise agreements, and Maryland addenda now to ensure that all materials used on or after October 1, 2026 comply with the amended statute.