In which state do Sections 24.1 and 24.2 of the Boulder Designs Franchise Agreement not apply?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
Sections 23.2 and 23.7 of the Franchise Agreement provides that Franchisees must consent to the jurisdiction of the McLennan County, Texas.
The Securities Commissioner of the State of North Dakota has held that requiring Franchisees to consent to jurisdiction of courts outside of North Dakota is unfair, unjust or inequitable within the intent of Section 51-19-09 of the North Dakota Investment Law.
The site of mediation or arbitration shall be agreeable to all parties; therefore, this provision is amended to provide that the state of mediation or arbitration shall be agreeable to all parties;
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to the 2025 Boulder Designs Franchise Disclosure Document, Sections 23.2 and 23.7 of the Franchise Agreement, which address consent to jurisdiction in McLennan County, Texas, do not apply in North Dakota. Instead, the document states that the site of mediation or arbitration must be agreeable to all parties involved.
This means that if a Boulder Designs franchisee is located in North Dakota, they are not required to consent to the jurisdiction of courts outside of North Dakota for dispute resolution. This amendment aims to protect the franchisee's rights under the North Dakota Franchise Investment Law, which views mandatory out-of-state jurisdiction as potentially unfair or inequitable.
For a prospective Boulder Designs franchisee in North Dakota, this is a beneficial modification. It ensures that any legal disputes can be resolved within North Dakota, unless all parties agree to an alternative location. This can save the franchisee time and money by avoiding the need to travel to Texas for legal proceedings.