Does this addendum to the Buff City Soap Franchise Agreement change the dispute resolution process for Buff City Soap?
Buff_City_Soap Franchise · 2025 FDDAnswer from 2025 FDD Document
nfair, unjust and inequitable within the intent of Section 51-19-09 of the North Dakota Franchise Investment Law.
-
- So long as required by North Dakota law, Section 26.H of the Franchise Agreement and section 15.H of the Area Development Agreement stipulates that the franchisee shall pay all costs and expenses incurred by the franchisor in enforcing the agreement. The Commissioner has determined this to be unfair, unjust, and inequitable within the intent of Section 51-19-09 of the North Dakota Franchise Investment Law. The provision shall be changed to read that the prevailing party in any enforcement action is entitled to recover all costs and expenses including attorney's fees.
-
- Section 4.1 of the Franchise Agreement is amended to add the following: The payment of the Initial Franchise Fees are not due until such time as the franchisor has fulfilled its pre-opening obligations and the franchisee has commenced business pursuant to the franchise agreement.
-
- No statement, questionnaire or acknowledgement signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of: (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on behalf of the Franchisor. This provision supersedes any other term of any document executed in connection with the franchise.
IN WITNESS WHEREOF, the parties have executed and delivered this Addendum on the dates noted below, to be effective as of the Effective Date.
Source: Item 6 — , Securities Offering Fee, in the amount column is revised to state the following: (FDD pages 216–303)
What This Means (2025 FDD)
Based on the 2025 FDD, the addenda to the Buff City Soap Franchise Agreement include modifications related to legal claims and enforcement expenses, which can be considered part of the dispute resolution process. Specifically, for franchisees in North Dakota, the addendum changes the original agreement stipulating that the franchisee would pay all costs and expenses incurred by Buff City Soap in enforcing the agreement. The addendum revises this to state that the prevailing party in any enforcement action is entitled to recover all costs and expenses, including attorney's fees. This change aims to address concerns that the original provision was unfair under North Dakota law.
For franchisees in Maryland, the addendum states that any terms in the Disclosure Document inconsistent with the terms outlined in the addendum will be controlled by the addendum. It also clarifies that representations requiring franchisees to release, estop, or waive liability will not act as a release, estoppel, or waiver of liability under the Maryland Franchise Registration and Disclosure Law. This ensures that franchisees retain their rights and protections under Maryland law, even if other documents suggest otherwise.
Additionally, addenda for Illinois, Minnesota, South Dakota, and Hawaii include provisions stating that no statement, questionnaire, or acknowledgement signed by a franchisee can waive claims under state franchise law, including fraud in the inducement, or disclaim reliance on behalf of Buff City Soap. This provision supersedes any other conflicting terms in any document executed in connection with the franchise. For Minnesota franchisees, the addendum specifies that no action may be commenced more than 3 years after the cause of action accrues, according to Minnesota law. These modifications collectively impact how disputes are handled, ensuring franchisees retain certain legal rights and protections while also adjusting the allocation of enforcement expenses in specific states.