Regarding restrictive covenants in the Bombs Away franchise, what specific disclosures are made concerning NDCC Section 9-08-06?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD 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.
Source: Item 23 — RECEIPTS (FDD pages 36–117)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, the document includes a North Dakota addendum that addresses restrictive covenants and their relationship to North Dakota Century Code (NDCC) Section 9-08-06. Specifically, the Securities Commissioner has deemed it unfair, unjust, or inequitable for franchise disclosure documents to mention covenants restricting competition without also disclosing that these covenants are subject to NDCC Section 9-08-06.
This disclosure is important for prospective Bombs Away franchisees in North Dakota because it clarifies that any restrictive covenants in the franchise agreement, which might limit their ability to compete with Bombs Away during or after the franchise term, are governed by North Dakota law. NDCC Section 9-08-06 likely places certain limitations or conditions on the enforceability of such covenants.
In practical terms, this means that a Bombs Away franchisee in North Dakota may have more legal protection against overly broad or restrictive non-compete clauses than franchisees in other states. It is advisable that prospective franchisees consult with a legal professional in North Dakota to fully understand the implications of NDCC Section 9-08-06 and how it affects their rights and obligations under the Bombs Away franchise agreement.