Does the Angry Chickz franchise disclosure document disclose the existence of covenants restricting competition contrary to Section 9-08-06, N.D.C.C. without further disclosing that such covenants will be subject to this statute?

According to the 2025 Angry Chickz Franchise Disclosure Document, an addendum for the state of North Dakota addresses restrictive covenants. Specifically, the FDD states that the North Dakota Securities Commissioner considers it unfair, unjust, or inequitable if franchise disclosure documents mention covenants restricting competition, which are contrary to Section 9-08-06, N.D.C.C., but do not further disclose that these covenants are subject to this statute. This disclosure is required to ensure that prospective Angry Chickz franchisees in North Dakota are aware of the legal limitations and protections afforded by North Dakota law regarding non-compete agreements.

This addendum aims to protect Angry Chickz franchisees in North Dakota by ensuring they are fully informed about the enforceability and limitations of restrictive covenants under North Dakota law. It prevents the franchisor from presenting non-compete clauses without acknowledging the franchisee's rights and the relevant state statutes that govern such agreements. This additional disclosure helps franchisees make informed decisions, understanding that their ability to compete after the franchise term might be protected by state law, despite what the initial franchise agreement might suggest.

For a prospective Angry Chickz franchisee in North Dakota, this means that any non-compete agreement outlined in the franchise documents must be viewed in light of Section 9-08-06, N.D.C.C. The franchisor is obligated to disclose that these covenants are subject to this statute, ensuring transparency and preventing any potential misinterpretation of the franchisee's rights. This requirement helps to level the playing field, providing franchisees with the necessary information to assess the fairness and legality of the non-compete provisions before entering into the franchise agreement.