What is the significance of the Rider to the 7 Brew Franchise Agreement in North Dakota?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
| THIS RIDER is made and entered into by and between BREW CULTURE |
|---|
| FRANCHISE, LLC, a Wyoming limited liability company whose principal business address is |
| 2710 S. 48th Street, Springdale, Arkansas 72762 ("we," "us," or "our"), and, a |
| ("you" or "your"). |
| 1. |
| BACKGROUND. We and you are parties to that certain Franchise Agreement |
| dated, 20 (the "Franchise Agreement"). This Rider is annexed |
| to and forms part of the Franchise Agreement. This Rider is being signed because (a) you are a |
| resident of North Dakota, and the 7 BREW Store you will operate under the Franchise Agreement |
| will be located in North Dakota, or (b) any of the franchise offer or sales activity relating to the |
| Franchise Agreement occurred in North Dakota. |
| 2. |
| RELEASES. The following language is added at the end of Sections 4.A, 16.A, |
| 16.C(2)(i), 16.G, 17, and 19.F(3) of the Franchise Agreement: |
| Any release executed will not apply to the extent otherwise prohibited by applicable |
| law with respect to claims arising under the North Dakota Franchise Investment |
| Law. |
| 3. |
| COVENANT NOT TO COMPETE. Section 19.E of the Franchise Agreement is |
| amended by adding the following: |
| Covenants not to compete such as those mentioned above are generally considered |
| unenforceable in the State of North Dakota. However, you acknowledge and agree |
| that we intend to seek enforcement of these provisions to the extent allowed under |
| the law. |
| 4. |
| ARBITRATION. The third sentence of Section 21.F of the Franchise Agreement |
| is amended to read as follows: |
| All proceedings, including the hearing, will be conducted at a suitable location that |
| is within ten (10) miles of where we have our (or, in the case of a transfer by us, |
| the then-current franchisor has its) principal business address when the arbitration |
| demand is filed, provided, however, that to the extent required by the North Dakota |
| Franchise Investment Law (unless such a requirement is preempted by the Federal |
| Arbitration Act), arbitration proceedings will be held at a site to which we and you |
| agree. |
- GOVERNING LAW. The following language is added at the end of Section 21.G of the Franchise Agreement:
Notwithstanding the foregoing, to the extent required by the North Dakota Franchise Investment Law, North Dakota law will apply to this Agreement.
- CONSENT TO JURISDICTION. The following language is added at the end of Section 21.H of the Franchise Agreement:
However, to the extent required by applicable law, but subject to your arbitration obligations, you may bring an action in North Dakota.
-
- WAIVER OF PUNITIVE AND EXEMPLARY DAMAGES AND JURY TRIAL. If and then only to the extent required by the North Dakota Franchise Investment Law, Sections 21.I and 21.J of the Franchise Agreement are deleted in their entirety.
-
- LIMITATION OF CLAIMS. The following sentence is added to the end of Section 21.L of the Franchise Agreement:
The statutes of limitations under North Dakota law apply with respect to claims arising under the North Dakota Franchise Investment Law.
Source: Item 22 — CONTRACTS (FDD pages 82–83)
What This Means (2025 FDD)
According to the 2025 FDD, the Rider to the 7 Brew Franchise Agreement for use in North Dakota addresses specific legal considerations for franchisees operating in that state. The rider is included because the franchisee is a resident of North Dakota, or the 7 Brew store will be located in North Dakota, or any franchise offer or sales activity occurred there.
The rider modifies certain sections of the standard franchise agreement to comply with the North Dakota Franchise Investment Law. Specifically, any releases executed by the franchisee will not waive rights to claims under the North Dakota Franchise Investment Law. While covenants not to compete are generally unenforceable in North Dakota, 7 Brew states that it intends to seek enforcement of these provisions to the extent allowed by law.
Additionally, the rider amends the arbitration clause, stating that arbitration proceedings will be held at a mutually agreed-upon site, to the extent required by the North Dakota Franchise Investment Law, unless preempted by the Federal Arbitration Act. North Dakota law will govern the agreement to the extent required by the North Dakota Franchise Investment Law, and franchisees may bring action in North Dakota, subject to arbitration obligations, to the extent required by applicable law. The rider also stipulates that if required by the North Dakota Franchise Investment Law, the sections of the agreement waiving punitive and exemplary damages and jury trial are deleted, and the statutes of limitations under North Dakota law apply to claims arising under the North Dakota Franchise Investment Law.