factual

What happens if a provision of the Amerispec Inspection Services agreement is unenforceable?

Amerispec_Inspection_Services Franchise · 2025 FDD

Answer from 2025 FDD Document

w should not be considered a waiver of any right conferred upon the Franchisor or upon the Franchisee by Article 33 of the General Business law of the state of New York."

IN WITNESS WHEREOF, the parties hereto have duly executed, sealed, and delivered this Addendum to the Agreement on the same day and year that the Agreement has been executed.

TCB AMERISPEC, LLC

ADDENDUM TO FRANCHISE DISCLOSURE DOCUMENT FOR THE STATE OF NORTH DAKOTA

The following information applies to franchises and Franchisees subject to North Dakota statutes and regulations. Item numbers correspond to those in the main body.

    1. Item 17. Item 17 is amended to read as follows:
  • A. Any provision of the Franchise Agreement requiring the Franchisee to sign a release in a format designated by AmeriSpec is unenforceable.
  • B. The prevailing party in any enforcement action is entitled to recover all costs and expenses including attorneys' fees.
  • C. Any provision of the Franchise Agreement requiring you to consent to waiver of exemplary and punitive damages is unenforceable under Section 51-19-09 of the North Dakota Franchise Investment Law.
  • D. Any provision of the Franchise Agreement requiring you to consent to liquidated damages is hereby made null and void pursuant to Section 51-19-09 of the North Dakota Franchise Investment Law.
  • E. Arbitration and mediation proceedings will be conducted at a site agreeable to all parties.
  • F. The venue of any litigation arising out of the franchise relationship between you and AmeriSpec will be within the state of North Dakota.
  • G. The North Dakota Securities Commissioner has held that requiring franchisees to consent to waiver of a trial by jury unfair, unjust or inequitable within the intent of Section 51-19-09 of the North Dakota Franchise Investment Law.
  • H. Notwithstanding anything in the Disclosure Document, covenants not to compete may be subject to Section 9-08-06 of the North Dakota Century Code and unenforceable in the state of North Dakota if contrary to Section 9-08-06.

ADDENDUM TO FRANCHISE AGREEMENT FOR THE STATE OF NORTH DAKOTA

This Addendum relates to franchises sold in the state of North Dakota and is intended to comply with North Dakota statutes and regulations. In consideration of the execution of the Franchise Agreement (the "Agreement"), TCB AMERISPEC, LLC (the "Company") and Franchisee agree to amend the Agreement as follows:

    1. North Dakota Century Code Section 9-08-06 states "Every contract by which anyone is restrained from exercising a lawful profession, trade, or business of any kind is to that extent void, except: 1) One who sells the goodwill of a business may agree with the buyer to refrain from carrying on a similar business within a specified county, city, or a part of either, so long as the buyer or any person deriving title to the goodwill from him carries on a like business therein and 2) Partners, upon or in anticipation of a dissolution of the partnership business has been transacted, or within a specified part thereof."

Source: Item 23 — Receipts (FDD pages 47–172)

What This Means (2025 FDD)

According to the 2025 Amerispec Inspection Services FDD, the consequences of an unenforceable provision in the franchise agreement depend on the specific jurisdiction. For franchisees in North Dakota, certain provisions are explicitly made unenforceable through addenda to both the Franchise Disclosure Document and the Franchise Agreement, ensuring compliance with North Dakota statutes and regulations.

Specifically, any clause requiring a franchisee to sign a release in a format designated by Amerispec Inspection Services is unenforceable in North Dakota. Additionally, any provision demanding consent to waive exemplary and punitive damages or to accept liquidated damages is null and void under North Dakota law. The FDD also clarifies that arbitration and mediation proceedings will occur at a mutually agreeable site, and any litigation's venue will be within North Dakota. Furthermore, the right to a jury trial cannot be waived. Covenants not to compete are subject to North Dakota Century Code Section 9-08-06 and may be unenforceable if they conflict with this section.

For franchisees in California, the FDD states that under California Civil Code Section 1671, certain liquidated damages clauses are unenforceable. Moreover, California Business & Professions Code Sections 20000 through 20043 grant franchisees rights regarding termination, transfer, or nonrenewal, and these legal provisions will supersede any conflicting terms in the Franchise Agreement. These stipulations ensure that the franchise agreement aligns with state laws, providing franchisees with specific protections and rights that override conflicting contractual terms.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.