What is the purpose of the Rider to the Franchise Agreement for Body20 franchisees in North Dakota?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
| 1. | BACKGROUND. We and you are parties to that certain Franchise Agreement | ||
|---|---|---|---|
| dated, 20 (the "Franchise Agreement"). | This Rider is | ||
| annexed to and forms part of the Franchise Agreement. This Rider is being signed because (a) | |||
| you are a resident of North Dakota and the Studio that you will operate under the Franchise | |||
| Agreement will be located or operated in North Dakota; and/or (b) any of the offering or sales | |||
| activity relating to the Franchise Agreement occurred in North Dakota. |
- RELEASES. The following is added to the end of Sections 2.2(d), 13.4(d), 13.5, 13.6, and 15.7(d)of the Franchise Agreement:
Any release required as a condition of renewal, sale and/or assignment/transfer will not apply to the extent prohibited by the North Dakota Franchise Investment Law.
- COVENANT NOT TO COMPETE. The following is added to the end of Section 12 of the Franchise Agreement:
Covenants not to compete such as those mentioned above are generally considered unenforceable in the State of North Dakota; however, we will enforce the covenants to the maximum extent the law allows.
- TERMINATION AND LIQUIDATED DAMAGES. The following is added to the end of Section 15.2 of the Franchise Agreement:
The Commissioner has determined termination or liquidated damages to be unfair, unjust and inequitable within the intent of Section 51-19-09 of the North Dakota Franchise Investment Law. However, Franchisor and Franchisee agree to enforce these provisions to the extent the law allows.
- GOVERNING LAW. The following is added to the end of Section 16.1 of the Franchise Agreement:
Notwithstanding the foregoing, to the extent required by the North Dakota Franchise Investment Law, North Dakota law will apply to this Agreement.
- ARBITRATION. The following is added to the end of Section 16.3 of the Franchise Agreement:
NOTWITHSTANDING THE FOREGOING, TO THE EXTENT REQUIRED BY THE NORTH DAKOTA FRANCHISE INVESTMENT LAW (UNLESS SUCH A
REQUIREMENT IS PREEMPTED BY THE FEDERAL ARBITRATION ACT), ARBITRATION PROCEEDINGS WILL BE HELD AT A SITE TO WHICH WE AND YOU AGREE.
- CONSENT TO JURISDICTION. The following language is added to the end of Section 16.3(d) of the Franchise Agreement:
However, to the extent required by applicable law, but subject to Franchisee's arbitration obligations, Franchisee may bring an action in North Dakota.
- WAIVER OF JURY TRIAL. If, and then only to the extent, required by the North Dakota Franchise Investment Law, Section 16.4 of the Franchise Agreement is deleted.
Source: Item 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to the 2025 Body20 Franchise Disclosure Document, the Rider to the Franchise Agreement for use in North Dakota addresses specific legal considerations related to franchising in that state. The Rider is made between Body20 Franchisor LLC and the franchisee, acknowledging that the franchisee is a resident of North Dakota or will operate the studio there, or that the franchise offering or sales activity occurred in North Dakota.
The Rider modifies several sections of the standard Franchise Agreement to align with the North Dakota Franchise Investment Law. These modifications cover areas such as releases, covenants not to compete, termination and liquidated damages, governing law, arbitration, consent to jurisdiction, and waiver of jury trial. For example, any release required as a condition of renewal or transfer will not apply to the extent prohibited by North Dakota law. Similarly, while covenants not to compete are generally unenforceable in North Dakota, Body20 will enforce them to the maximum extent the law allows.
These stipulations ensure that the Body20 franchise agreement complies with North Dakota's franchise laws, providing franchisees with certain protections and rights mandated by the state. Prospective franchisees in North Dakota should carefully review this Rider to understand how their Franchise Agreement is specifically adapted to comply with local regulations, particularly regarding dispute resolution and termination clauses.