Does the Benjamin Franklin Plumbing franchise disclosure document disclose the existence of covenants restricting competition, and if so, does it further disclose that such covenants will be subject to Section 9-08-06, N.D.C.C.?

According to the 2025 Benjamin Franklin Plumbing Franchise Disclosure Document, the document addresses restrictive covenants in North Dakota. Specifically, the FDD acknowledges that the North Dakota Securities Commissioner considers it unfair for franchise disclosure documents to disclose restrictive covenants that run contrary to Section 9-08-06, N.D.C.C., without also disclosing that these covenants are subject to that statute. This indicates that Benjamin Franklin Plumbing is aware of and discloses the existence of covenants restricting competition in its franchise agreements, and further clarifies that these covenants will be subject to North Dakota law.

For a prospective Benjamin Franklin Plumbing franchisee in North Dakota, this disclosure is crucial. It means that any restrictive covenants, such as non-compete clauses, included in the franchise agreement are subject to the limitations and provisions of Section 9-08-06 of the North Dakota Century Code. This law likely places restrictions on the enforceability and scope of such covenants, potentially limiting the franchisor's ability to prevent a franchisee from competing after the franchise relationship ends.

This disclosure provides a level of protection for franchisees in North Dakota, ensuring that they are aware of their rights and the limitations on restrictive covenants under state law. It also highlights Benjamin Franklin Plumbing's compliance with North Dakota franchise regulations, specifically addressing concerns raised by the North Dakota Securities Commissioner regarding fairness and equity in franchise agreements. Franchisees should carefully review the specific language of any restrictive covenants in the franchise agreement and understand how Section 9-08-06, N.D.C.C., applies to those covenants.