Franchisors who want to offer or sell franchises in Maryland must register with the Maryland Securities Commissioner, Office of the Attorney General, Securities Division under the Maryland Franchise Registration and Disclosure Law (MFRDL), Annotated Code of Maryland, Business Regulation Article Sections 14-201 through 14-233. The initial registration fee is $250 and annual renewal costs $100. These are among the lowest registration fees in any state, making Maryland one of the most cost-effective registration states to maintain. The review process typically takes 4 to 6 weeks for a complete submission.

Maryland has both registration requirements and strong relationship law protections under Sections 14-227 through 14-233. The Maryland Addendum to the franchise agreement must bring the agreement into full compliance with the MFRDL relationship law provisions. Getting the addendum right matters not just for registration approval, but because the MFRDL includes an explicit anti-waiver provision: any franchise agreement clause that purports to waive MFRDL rights is void and unenforceable. This guide covers every step of the Maryland registration process for franchisors.

How Do I Register My Franchise in Maryland?

Step 1: Prepare a Complete, FTC-Compliant FDD

Begin with a fully compliant FDD under the FTC Franchise Rule. For Maryland, the Securities Division pays particular attention to Item 21 (financial statements) and Item 20 (outlets). If the franchisor is a relatively young system, the Division will scrutinize whether the financial disclosures adequately reflect the franchisor’s capacity to support the franchise system. Weak or incomplete financial disclosures are a common source of comment letters in Maryland.

Maryland also reviews Item 7 (initial investment) carefully. The initial investment table should be complete, accurate, and use Maryland-realistic cost estimates where costs vary by geography. A Maryland franchisee investing in the Baltimore-Washington metropolitan area may face higher real estate and labor costs than the national averages in the FDD. If the FDD uses national averages that significantly understate Maryland costs, the Division may raise questions.

Step 2: Draft Maryland-Specific Addenda

Maryland requires both an Maryland Addendum to the FDD and a Maryland Addendum to the Franchise Agreement. The FDD Addendum typically includes required disclosures about MFRDL relationship law protections. The Franchise Agreement Addendum is the operative compliance document: it modifies the main franchise agreement to comply with MFRDL Sections 14-227 through 14-233.

The MFRDL’s anti-waiver provision makes the addendum especially important. Even if the main franchise agreement contains a choice-of-law clause specifying that another state’s law governs, Maryland courts will apply MFRDL protections to Maryland franchise relationships. The addendum should make this explicit rather than leaving it to courts to resolve after a dispute arises.

Step 3: Compile the Registration Package

A complete Maryland registration package includes:

• Completed Maryland registration application form
• Complete FDD with all exhibits, properly formatted
• Maryland Addendum to the FDD
• Maryland Addendum to the Franchise Agreement
• Audited financial statements (or qualification for an exemption)
• Consent to service of process in Maryland
• Any franchise salesperson registration forms required by Maryland
• Registration fee of $250

Step 4: File and Respond to Any Comment Letters

Submit the registration package to the Maryland Securities Division. The Division will review the submission and may issue comment letters requesting clarifications or corrections. At Lopes Law LLC, the most common comment letter issues in Maryland involve the non-renewal notice provision in the Franchise Agreement Addendum (the 180-day advance notice requirement must be explicit) and the right-to-associate clause (must be specifically incorporated, not just referenced generally).

Step 5: Receive Registration Order and Begin Selling

Once the Securities Commissioner issues a registration order, the franchisor is authorized to offer and sell franchises in Maryland. Registration is required before any offer is made to a Maryland resident. There is no provisional period or conditional status: you need an effective registration order before any Maryland sales activity begins.

What Must the Maryland Franchise Agreement Addendum Include?

The Maryland Addendum is required to bring the franchise agreement into compliance with MFRDL Sections 14-227 through 14-233. Here is what the Securities Division requires:

Good Cause Termination Language

The addendum must modify any termination provision that permits termination without good cause. Under the MFRDL, good cause means a material breach of the franchise agreement by the franchisee. The addendum should specify that termination requires written notice identifying the specific breach, and that the franchisee must be given an opportunity to cure the breach within the applicable cure period before termination can proceed.

Advance Notice and Good Cause for Non-Renewal

This is the most impactful modification Maryland requires and the one most frequently inadequately addressed in franchise agreement addenda. Under the MFRDL, the franchisor must provide advance written notice of at least 180 days before the end of the franchise term if it intends not to renew, and must have good cause for the non-renewal decision.

Most standard franchise agreements contain provisions allowing the franchisor to decline renewal with 60, 90, or 180 days notice. Some contain no notice requirement at all. The Maryland Addendum must modify these provisions to require at minimum a 180-day advance written notice of non-renewal, and must require that the non-renewal be based on good cause. Vague language that references “applicable law” without specifying the 180-day period is typically flagged by the Division as insufficient.

Right to Associate

The addendum must include language preserving the franchisee’s right to associate with other Maryland franchisees, form franchisee associations, and participate in organized franchisee groups without penalty. Any franchise agreement provision that restricts or penalizes association activity must be modified in the addendum. The right-to-associate clause is one of the provisions the Maryland Division specifically looks for in the addendum.

Transfer Rights with Reasonable Standards

The addendum must modify transfer provisions to reflect Maryland’s requirement that franchisor approval cannot be unreasonably withheld. The addendum should specify what constitutes legitimate grounds for disapproving a transfer (financial qualifications, training completion, relevant experience) and should include a process for the franchisee to propose a transfer and receive a timely decision.

Constructive Termination Protections

Maryland recognizes constructive termination claims. The addendum should address this by confirming that the franchisor’s obligations under the good cause termination requirement apply not only to formal terminations but also to actions that effectively terminate the franchisee’s ability to operate their business. This typically takes the form of a disclosure that the MFRDL applies to constructive termination situations, combined with the general good cause termination language.

Anti-Waiver Provision and Choice-of-Law Modification

The Maryland Addendum must include an explicit anti-waiver provision stating that the franchisee cannot waive MFRDL rights. It must also modify any choice-of-law provision in the main franchise agreement to clarify that Maryland law governs MFRDL claims arising from Maryland franchise relationships, notwithstanding any provision specifying another state’s law. This is a non-negotiable provision: the MFRDL’s anti-waiver provision is statutory and applies regardless of what the agreement says.

Annual Renewal Requirements

Maryland registration must be renewed annually at a cost of $100. The renewal filing must include updates reflecting any material changes since the prior registration. Material changes include:

• Changes to the franchise agreement or addendum
• Updates to audited financial statements
• Material litigation developments (new franchise-related lawsuits, settlements, or judgments)
• Changes to the fee schedule in the FDD
• Changes to Item 20 (outlets) that reflect significant changes in system performance
• Changes to Item 3 (litigation) reflecting actions relevant to franchise relationships

The $100 annual renewal fee is one of the lowest among registration states, making Maryland registration economical to maintain even for franchisors with limited Maryland sales activity. A lapsed Maryland registration cannot be reactivated retroactively: if you miss a renewal deadline and sell in Maryland during the lapsed period, you have violated the MFRDL for that entire period.

Exemptions from Maryland Franchise Registration

The MFRDL provides exemptions for certain categories of transactions. Commonly applicable exemptions involve large initial franchise fee transactions and sophisticated investors meeting certain financial and business experience thresholds. Exemptions must be confirmed before relying on them. The MFRDL’s exemption provisions have specific conditions that must be satisfied, and a franchisor who miscalculates an exemption faces the same liability as one who simply failed to register.

Anthony Lopes, Esq. advises franchisors to treat Maryland exemption claims with particular caution because of the MFRDL’s anti-waiver provision. Even if a transaction is exempt from the registration requirement, the relationship law protections under Sections 14-227 through 14-233 still apply to the ongoing franchise relationship. A franchisor who claims a registration exemption but then attempts to terminate a Maryland franchisee without good cause is still subject to MFRDL relationship law, regardless of whether the initial sale was registered.

At Lopes Law LLC, we document every Maryland exemption analysis in a written memorandum for the franchisor’s file. This protects the franchisor if the exemption is later questioned by the Securities Division or by a franchisee in litigation. The cost of preparing this analysis is typically $500 to $1,000, compared to the potential rescission liability on a franchise fee of $25,000 to $50,000 or more.

Maryland in a Multi-State Registration Strategy

Maryland is among the most cost-effective registration states to maintain in a multi-state portfolio, given its $250 initial and $100 annual fees. For franchisors targeting the mid-Atlantic market, Maryland is typically filed alongside Virginia and New York. The Baltimore-Washington metropolitan area represents a high-value franchise market with strong demographics across restaurant, fitness, healthcare, and professional services categories.

For franchisors filing in all three mid-Atlantic registration states simultaneously, combined initial fees total approximately $1,500 ($250 for Maryland, $500 for Virginia, $750 for New York). At Lopes Law LLC, a coordinated mid-Atlantic filing typically takes 8 to 12 weeks to complete across all three states, with Maryland usually approved first due to its faster review timeline. Franchisors should budget $3,000 to $7,500 in total legal fees for a three-state mid-Atlantic registration project, depending on the complexity of the FDD and whether addenda need to be drafted from scratch.

For an overview of all 14 registration states and multi-state registration strategy, see: Franchise Registration States: The Complete 2026 Guide. For the full franchise development process before registration, see: How to Franchise Your Business: A Legal Roadmap for 2026. For a plain-language discussion of what franchise legal services cost: How Much Does a Franchise Lawyer Cost in 2026?

Frequently Asked Questions About Maryland Franchise Compliance for Franchisors

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