Maryland has updated its franchise registration and disclosure regime. Franchisors selling in the state have a compliance deadline to plan around. On May 12, 2026, Governor Wes Moore signed H.B. 730, amending the Maryland Franchise Registration and Disclosure Law (Md. Bus. Reg. Code Ann. §§14-201 et seq.). The amendments take effect October 1, 2026. The Securities Division of the Office of the Maryland Attorney General (Maryland’s franchise regulator) has issued a Notice — including an Interpretive Opinion/No-Action Position — explaining how it will approach transition compliance. Here’s a summary of what has changed and what franchisors should do about it.
The Five Key Changes
- Longer regulator enforcement window. The Maryland Securities Commissioner’s authority to pursue enforcement actions for violations of the Maryland Franchise Law now extends from three years after a violation to five years after the violation occurs (§14-210(c)). Franchisors should expect a longer look-back period for state enforcement exposure.
- Scope clarification for Section 14-227. A new §14-227(a) clarifies that this section — which addresses franchisee rights (including rights to sue their franchisor in certain situations) — applies only to a franchisee who resides in Maryland, or to a franchised business that operates or will operate in the state. The remaining subsections of the former §14-227 are renumbered accordingly.
- Longer private civil action window. The limitations period for a franchisee to bring a private civil action changes from three years after the grant of the franchise to the earlier of: (i) four years after the franchise is granted, or (ii) two years after the franchise opened to the public (§14-227(f)). This is a substantive change that directly affects franchise agreement and disclosure document language, discussed below.
- New trade-association / free-association rights. Amended §14-233 (with the former §14-233 renumbered to §14-234) now guarantees franchisees the right to join a trade association made up of other franchisees of the same brand and to participate in it for any lawful purpose. Franchisors — and their officers, agents, or employees — are prohibited from directly or indirectly restricting or inhibiting that right, or otherwise prohibiting free association among franchisees. Critically, the amendment creates a private cause of action for violations, meaning franchisee associations (or individual franchisees) can sue over restrictive conduct or contract language that runs afoul of this provision.
- Statutory Fast-Track renewal program. The Franchise Disclosure Document (FDD) Renewal Fast-Track Review Pilot Program, which the Securities Division in Maryland ran informally during the 2026 renewal season, is now formally codified (§14-219.1). Franchisors renewing in Maryland should confirm whether they qualify for and can meet the deadlines (including audited financial statement deadlines) for expedited review, and confer with their franchise counsel as to whether such expedited review is likely to make much difference for them in their specific case.
How the Securities Division Will Handle the Transition
Importantly, the Maryland Securities Division is not requiring registered franchisors to immediately amend their filings on October 1, 2026 solely because of these statutory changes. Under the Interpretive Opinion/No-Action Position appended to the Notice recently issued by the Maryland Securities Division, a franchisor may continue offering and selling franchises in Maryland after the effective date without filing a post-effective amendment — and without pausing sales — provided that the FDD and related agreements (or addenda) actually being used with prospective Maryland franchisees have already been updated to comply with the new amendments. Formal review by the Division of the updated language will happen at the franchisor’s next renewal or amendment filing, whichever comes first.
In short: the filing deadline is flexible, but the substantive compliance deadline is not. A franchisor cannot keep using pre-amendment disclosure and agreement language in live Maryland offers past October 1, 2026, even if its registration itself is not due for renewal.
What Franchisors Should Do Now
Update the Maryland statute-of-limitations disclosure / addendum language. This is the one change the Notice specifically flags as requiring conforming document language. Franchise agreements, area development agreements, and/or the Maryland-specific state-law addenda in the franchisor’s FDD should be revised to state:
“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.”
Such change becomes effective October 1, 2026, so framing the above disclosure in a manner so as to be clear about the time period when it begins to apply may be advisable.
Review non-solicitation, non-disparagement, and communication-restriction provisions. With the new trade-association and free-association protections in §14-233, franchisors should scrutinize any contract language, franchisee-communication policies, or informal practices that could be read as discouraging franchisees from joining or participating in a franchisee association. Given the new private right of action, this is a real litigation risk area, not just a disclosure formality. For many franchisors this may not present any issue or any need to change documents, policies or practices, but the question should be examined by each franchisor in the context of their particular system.
Confirm your enforcement-exposure runway internally. The extended five-year Securities Commissioner enforcement window does not require document changes, but compliance, legal, and franchise development teams should factor the longer look-back period into recordkeeping and internal compliance review practices.
Time your Maryland FDD update to your renewal cycle — but do not wait past October 1 for the substantive language. Because the Maryland Securities Division states that it will not force an off-cycle amendment to address these changes, franchisors can bundle these changes into their next scheduled renewal or amendment to their FDD filed with Maryland. However, the underlying agreement / Maryland addendum language must already reflect the new limitations period for any Maryland offer or sale made on or after October 1, 2026.
Evaluate Fast-Track eligibility for your next renewal. With the pilot program now a permanent statutory feature, franchisors renewing after October 1 should ask counsel whether their filing qualifies for expedited review, whether participating in the “fast track” program makes sense and is likely to make much difference for them, and plan renewal timing accordingly.
Bottom Line
Maryland’s amendments extend both regulatory and private enforcement windows, add new franchisee association protections with real teeth (a private cause of action), and formalize a faster renewal track — all without forcing an immediate registration amendment. The practical trap is the gap between the filing grace period and the substantive compliance deadline: franchisors need updated Maryland addendum and agreement language in place for any offer or sale on or after October 1, 2026, even if their next formal renewal is months away. Franchise counsel should audit Maryland-facing FDDs and agreements now to avoid using stale disclosure language in the interim.
This post is a general summary of recent legal developments and does not constitute legal advice. Franchisors should consult counsel regarding their specific Maryland compliance obligations. If you have questions about this or any other franchise matters, please call David B. Ramsey, Esq. at 212-755-3100 or email him at [email protected].