In North Dakota, can an Aerus franchisee be required to consent to termination or liquidated damages?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
ranchisee must consent to the jurisdiction of courts outside that State of North Dakota. That requirement may not be enforceable under North Dakota law.
The Franchise Disclosure Document and Franchise Agreement may require franchisees to consent to termination or liquidated damages. This requirement may not be enforceable under North Dakota law.
NORTH DAKOTA ADDENDUM TO FRANCHISE AGREEMENT
To the extent the North Dakota Franchise Investment Law, N.D. Cent.
Source: Item 23 — Receipts (FDD pages 74–305)
What This Means (2025 FDD)
According to Aerus's 2025 Franchise Disclosure Document, the requirement that a franchisee consent to termination or liquidated damages may not be enforceable under North Dakota law. The FDD and Franchise Agreement may contain such a requirement, but the North Dakota Franchise Investment Law views this as potentially unfair.
Specifically, the Commissioner has determined that requiring a franchisee to consent to termination or liquidated damages is considered unfair, unjust, and inequitable under the North Dakota Franchise Investment Law. Therefore, while the franchise agreement might include such a clause, it might not be legally upheld in North Dakota.
This means that if a dispute arises in North Dakota regarding termination or liquidated damages, an Aerus franchisee may have legal grounds to challenge the enforceability of any clause requiring their consent. Prospective franchisees in North Dakota should be aware of this protection under state law and consult with legal counsel to understand their rights fully.