Does Apricot Lane utilize restrictive covenants in its Franchise Disclosure Documents that might be subject to Section 9-08-06 of the North Dakota Century Code?
Apricot_Lane Franchise · 2025 FDDAnswer from 2025 FDD Document
Pursuant to Section 51-19-09 of the North Dakota Century Code, the North Dakota Securities Commissioner has held the following to be unfair, unjust or inequitable to North Dakota franchisees:
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- Restrictive Covenants: Franchise Disclosure Documents which 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.
Source: Item 23 — RECEIPTS (FDD pages 51–222)
What This Means (2025 FDD)
According to the 2025 Apricot Lane Franchise Disclosure Document, the document includes addenda required by certain states, including North Dakota, that address issues specific to franchise law in those states. For North Dakota franchisees, the FDD acknowledges that the North Dakota Securities Commissioner considers certain practices unfair, unjust, or inequitable.
Specifically, the Apricot Lane FDD states that franchise disclosure documents that include covenants restricting competition, which would be contrary to Section 9-08-06 of the North Dakota Century Code, must disclose that these covenants are subject to that statute. This suggests that Apricot Lane's standard franchise agreement may contain restrictive covenants.
This disclosure indicates that Apricot Lane's franchise agreements may contain restrictive covenants that could be subject to scrutiny under North Dakota law. A prospective franchisee in North Dakota should carefully review the franchise agreement and any related documents with legal counsel to understand the implications of these covenants and how they are affected by North Dakota Century Code Section 9-08-06.