factual

What franchisee right does the Casiola Franchise Agreement consider unfair, unjust, and inequitable to waive according to North Dakota Franchise Investment Law?

Casiola Franchise · 2024 FDD

Answer from 2024 FDD Document

siness days before the execution of the franchise or other agreement, or the payment of any consideration that relates to the franchise relationship.

North Dakota FDD Amendment

Amendments to the Casiola Franchise Disclosure Document

  1. Item 5, "Initial fees," Item 5 is supplemented by the addition of the following:

Refund and cancellation provisions will be inapplicable to franchises operating under North Dakota Law, North Dakota Century Code Annotated Chapter 51-19, Sections 51-19-01 through 51-19-17. If franchisor elects to cancel this Franchise Agreement, franchisor will be entitled to a reasonable fee for its evaluation of you and related preparatory work performed and expenses actually incurred.

  1. Item 6, "Other Fees," Item 6 is supplemented by the addition of the following:

No consent to termination or liquidated damages shall be required from franchisees in the State of North Dakota.

    1. Item 17, "Renewal, Termination, Transfer and Dispute Resolution," Item 17 is supplemented by the addition of the following:
    • A. Any provision requiring a franchisee to sign a general release upon renewal of the Franchise Agreement has been determined to be unfair, unjust and inequitable within the intent of Section 51- 19-09 of the North Dakota Franchise Investment Law.
    • B. Any provision requiring a franchisee to consent to termination or liquidation damages has been determined to be unfair, unjust and inequitable within the intent of Section 51-19-09 of the North Dakota Franchise Investment Law.
    • C. Covenants restricting competition contrary to Section 9-08-06 of the North Dakota Century Code, without further disclosing that such covenants may be subject to this statute, are unfair, unjust and inequitable. Covenants not to compete such as those mentioned above are generally considered unenforceable in the State of North Dakota.
    • D. Any provision in the Franchise Agreement requiring a franchisee to agree to the arbitration or mediation of disputes at a location that is remote from the site of the franchisee's business has been determined to be unfair, unjust and inequitable within the intent of Section 51-19-09 of the North Dakota Franchise Investment Law. The site of arbitration or mediation must be agreeable to all parties and may not be remote from the franchisee's place of business.
    • E. Any provision in the Franchise Agreement which designates jurisdiction or venue or requires the franchisee to agree to jurisdiction or venue in a forum outside of North Dakota is void with respect to any cause of action which is otherwise enforceable in North Dakota.
    • F. Apart from civil liability as set forth in Section 51-19-12 of the N.D.C.C., which is limited to violations of the North Dakota Franchise Investment Law (registration and fraud), the liability of the franchisor to a franchisee is based largely on contract law. Despite the fact that those provisions are not contained in the franchise investment law, those provisions contain substantive rights intended to be afforded to North Dakota residents and it is unfair to franchise investors to require them to waive their rights under North Dakota Law.

  • G. Any provision in the Franchise Agreement requiring that the Franchise Agreement be construed according to the laws of a state other than North Dakota are unfair, unjust or inequitable within the intent of Section 51-19-09 of the North Dakota Franchise Investment Law.
  • H.

Source: Item 23 — RECEIPTS (FDD pages 47–209)

What This Means (2024 FDD)

According to Casiola's 2024 Franchise Disclosure Document, several provisions in the Franchise Agreement are deemed unfair, unjust, and inequitable for North Dakota franchisees under Section 51-19-09 of the North Dakota Franchise Investment Law. These include provisions requiring a franchisee to sign a general release upon renewal of the Franchise Agreement, consent to termination or liquidated damages, or agree to arbitration or mediation of disputes at a location remote from the franchisee's business. Additionally, any provision designating jurisdiction or venue in a forum outside of North Dakota is void concerning any cause of action enforceable in North Dakota.

Furthermore, the Franchise Agreement cannot require franchisees to construe the agreement according to the laws of a state other than North Dakota. Casiola also cannot enforce any provision that requires a franchisee to waive their right to a jury trial. These stipulations are in place to protect the rights of franchisees operating within North Dakota and ensure they are not subjected to unfair or inequitable conditions that might otherwise be imposed by the standard Franchise Agreement.

Finally, provisions requiring the franchisee to consent to a limitation of claims within one year have been determined to be unfair, unjust and inequitable within the intent of Section 51-19-09 of the North Dakota Franchise Investment Law. Therefore, for North Dakota franchisees, the statute of limitations under North Dakota Law will apply.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.