Under what condition regarding arbitration or litigation between Annex Brands and the franchisee must the franchisee pay Annex Brands' attorneys' fees and costs in North Dakota?

According to Annex Brands' 2025 Franchise Disclosure Document, a North Dakota addendum modifies the standard franchise agreement regarding attorneys' fees and costs. Specifically, a franchisee is only required to pay Annex Brands' attorneys' fees and costs if Annex Brands prevails in any arbitration or litigation between the franchisee and Annex Brands. This is a deviation from the standard agreement, where the franchisee might be responsible for these fees under broader circumstances. This modification is designed to provide additional protection to franchisees operating in North Dakota.

This addendum means that a franchisee in North Dakota is shielded from paying Annex Brands' legal expenses unless Annex Brands wins the legal dispute. This can significantly reduce the financial risk for franchisees, as legal battles can be costly, regardless of the outcome. It also potentially discourages Annex Brands from pursuing frivolous claims against franchisees, as they would bear their own legal costs if they do not win.

Prospective franchisees should be aware of this specific protection afforded to them under North Dakota law. It is important to note that this protection applies specifically to arbitration or litigation between the franchisee and Annex Brands. Franchisees should consult with a legal professional to fully understand their rights and obligations under the franchise agreement and the North Dakota Franchise Investment Law.