Does the North Dakota addendum modify any fees associated with a Bombs Away franchise?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
NORTH DAKOTA ADDENDUM TO DISCLOSURE DOCUMENT
In the State of North Dakota only, this Disclosure Document is amended as follows:
THE SECURITIES COMMISSIONER HAS HELD THE FOLLOWING TO BE UNFAIR, UNJUST OR INEQUITABLE TO NORTH DAKOTA FRANCHISEES (NDCC SECTION 51-19-09):
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- Restrictive Covenants: Franchise disclosure documents that disclose the existence of covenants restricting competition contrary to NDCC Section 9-08-06, without further disclosing that such covenants will be subject to the statute.
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- Situs of Arbitration Proceedings: Franchise agreements providing that the parties must agree to the arbitration of disputes at a location that is remote from the site of the franchisee's business.
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- Restrictions on Forum: Requiring North Dakota franchisees to consent to the jurisdiction of courts outside of North Dakota.
Source: Item 23 — RECEIPTS (FDD pages 36–117)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, the North Dakota addendum addresses specific legal considerations for franchisees in that state but does not explicitly modify any fees. The addendum focuses on ensuring that certain provisions within the franchise agreement comply with North Dakota law, particularly concerning franchisees' rights.
The North Dakota addendum outlines specific points deemed unfair, unjust, or inequitable to North Dakota franchisees, according to NDCC Section 51-19-09. These points include restrictive covenants, the situs of arbitration proceedings, and restrictions on forum. The addendum mandates that franchise disclosure documents acknowledge that restrictive covenants restricting competition are subject to NDCC Section 9-08-06. It also addresses the location of arbitration for disputes and ensures North Dakota franchisees are not forced to consent to the jurisdiction of courts outside of North Dakota.
While the addendum does not directly change any fee amounts, it does protect franchisees by ensuring certain legal rights are upheld under North Dakota law. This can have indirect financial implications by preventing Bombs Away from enforcing potentially unfair terms related to dispute resolution or restrictive covenants, which could save a franchisee money in legal costs or lost business opportunities. Prospective franchisees in North Dakota should carefully review this addendum with legal counsel to understand their rights and how it affects their franchise agreement.