Does this addendum to the Buff City Soap Franchise Agreement change the indemnification obligations of a Buff City Soap franchisee?
Buff_City_Soap Franchise · 2025 FDDAnswer from 2025 FDD Document
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- 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.
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)
According to the 2025 Buff City Soap Franchise Disclosure Document, an addendum modifies the franchise agreement regarding costs and expenses in North Dakota. Specifically, Section 26.H of the Franchise Agreement and section 15.H of the Area Development Agreement previously stipulated that the franchisee would pay all costs and expenses incurred by Buff City Soap in enforcing the agreement.
The addendum addresses concerns raised by the North Dakota Commissioner, who deemed this provision unfair under Section 51-19-09 of the North Dakota Franchise Investment Law. As a result, the addendum changes the provision to state that the prevailing party in any enforcement action is entitled to recover all costs and expenses, including attorney's fees.
For a prospective Buff City Soap franchisee in North Dakota, this change means that the risk of bearing all enforcement costs is removed. Instead, the franchisee will only be responsible for such costs if they do not prevail in an enforcement action. This modification aims to create a fairer and more equitable balance of power between Buff City Soap and its franchisees in North Dakota, aligning with the state's franchise investment law.