What law governs the Buff City Soap franchise agreement in North Dakota?
Buff_City_Soap Franchise · 2025 FDDAnswer from 2025 FDD Document
Applicable Laws: North Dakota law will govern the franchise agreement.
Waiver of Trial by Jury: Any waiver of a trial by jury will not apply to North Dakota Franchises.
Item 17(i) of the Disclosure Document, Section 15 of the Franchise Agreement and Section 5 of the Development Agreement requires the franchisee to consent to termination or liquidated damages. 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.
Waiver of Exemplary & Punitive Damages: Any waiver of punitive damages will not apply to North Dakota Franchisees.
General Release: Any requirement that the franchisee sign a general release upon renewal of the franchise agreement does not apply to franchise agreements covered under North Dakota law. Enforcement of Agreement: Any requirement in the Franchise Agreement that requires the franchisee to pay all costs and expenses incurred by the franchisor in enforcing the agreement is void. Instead, the prevailing party in any enforcement action is entitled to recover all costs and expenses including attorney's fees.
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.
Source: Item 17 — (r) is amended subject to Indiana Code 23-2-2.7-1(9) to provide that the post-term noncompetition covenant shall have a geographical limitation of the territory granted to Franchisee. (FDD pages 210–216)
What This Means (2025 FDD)
According to the 2025 Buff City Soap Franchise Disclosure Document, the franchise agreement for North Dakota franchisees is governed by North Dakota law. This means that the legal framework and statutes of North Dakota will be used to interpret and enforce the terms of the franchise agreement.
Several specific provisions are added to the FDD to comply with North Dakota franchise law. For example, any waiver of a trial by jury will not apply to North Dakota franchisees. Additionally, any requirement in the Franchise Agreement that requires the franchisee to pay all costs and expenses incurred by Buff City Soap in enforcing the agreement is void. Instead, the prevailing party in any enforcement action is entitled to recover all costs and expenses including attorney's fees.
Moreover, the FDD states that 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 waiving any claims under any applicable state franchise law, including fraud in the inducement, or disclaiming reliance on behalf of the Franchisor. This provision supersedes any other term of any document executed in connection with the franchise. These stipulations ensure that franchisees in North Dakota retain certain legal rights and protections under state law, regardless of what the standard franchise agreement might otherwise stipulate.
Prospective Buff City Soap franchisees in North Dakota should carefully review these state-specific amendments to fully understand their rights and obligations under the franchise agreement, as North Dakota law takes precedence over conflicting terms in the standard agreement.