In a significant move aimed at modernizing franchise regulations, Maryland's House Bill 992, also known as the Franchise Reform Act, was introduced on March 15, 2025. This legislation seeks to amend existing laws governing franchise registration and disclosure, addressing key issues faced by franchisees and franchisors in the state.

The bill proposes several critical changes, including extending the timeframe within which the Securities Commissioner can exercise powers related to franchise sales. It mandates that the exemption for franchise registration be adjusted according to inflation or deflation, ensuring that the financial thresholds remain relevant over time. Additionally, the bill alters the statute of limitations for bringing liability actions concerning franchise offers, which could impact how disputes are resolved in the franchise sector.

One of the most notable provisions of House Bill 992 is the prohibition against franchisors impeding franchisees' rights to associate for collective bargaining or other purposes. This aspect of the bill has sparked considerable debate, as it aims to empower franchisees, who often face challenges in negotiating terms with larger franchising entities. The bill also allows for legal action against franchisors under specific circumstances, potentially increasing accountability within the franchise system.

The introduction of a pilot program by the Securities Commissioner to expedite the review of franchise registration renewal applications is another key feature of the bill. This initiative aims to streamline the process for franchisees, reducing bureaucratic delays that can hinder business operations.

The implications of House Bill 992 are significant, as it seeks to balance the interests of franchisors and franchisees while promoting a fairer business environment. Experts suggest that these reforms could lead to a more equitable franchise landscape in Maryland, fostering growth and innovation in the sector. However, some franchisors have expressed concerns about the potential for increased litigation and regulatory burdens that could arise from the new provisions.

As the bill progresses through the legislative process, its outcomes will be closely monitored by stakeholders in the franchise community. The potential for amendments and further debates remains, particularly regarding the balance of power between franchisors and franchisees. The Maryland General Assembly's actions on House Bill 992 could set a precedent for franchise regulation in other states, making it a pivotal moment for the industry.