House Bill 992, introduced in Maryland on March 15, 2025, aims to enhance the rights of franchisees by prohibiting franchisors from restricting their ability to join trade associations or engage in free association for lawful purposes. This legislation seeks to address concerns about the power imbalance between franchisors and franchisees, which has been a growing issue in the franchise industry.

Key provisions of the bill include a clear prohibition against franchisors directly or indirectly limiting franchisees' rights to organize and associate with one another. If a franchisor violates this provision, franchisees can seek legal recourse in circuit court, including temporary or permanent injunctive relief, damages, and coverage of legal costs. Notably, the bill allows for injunctive relief without the need for franchisees to prove actual damages, which could empower more franchisees to take action against unfair practices.

The introduction of House Bill 992 has sparked debates among stakeholders in the franchise community. Supporters argue that the bill is a necessary step to protect franchisees from potential exploitation and to foster a more equitable business environment. Critics, however, express concerns that the bill may lead to increased litigation and could disrupt the franchising model, which relies on a certain level of control by franchisors to maintain brand consistency.

The implications of this bill could be significant for the franchise industry in Maryland. If passed, it may encourage more franchisees to advocate for their rights and join associations, potentially leading to a stronger collective voice in negotiations with franchisors. Economically, this could shift the dynamics of franchise operations, impacting profitability and operational strategies for franchisors.

As House Bill 992 moves through the legislative process, its future remains uncertain. Observers will be watching closely to see how lawmakers address the concerns raised during discussions and whether amendments will be made to balance the interests of both franchisors and franchisees. The outcome of this bill could set a precedent for similar legislation in other states, influencing the broader landscape of franchise law across the country.