Does the Chatime franchise agreement specify that it is governed by the laws of a state other than North Dakota?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
E. Applicable Laws: Franchise agreements that specify that they are to be governed by the laws of a state other than North Dakota.
- The language in Clause 25.1 of the Franchise Agreement, and if applicable Clause 23.1 of the Multi-Unit Development Agreement, is hereby deleted it its entirety, and replaced with the following:
This Agreement will be interpreted and construed exclusively under the laws of the State of North Dakota.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to the 2025 Chatime Franchise Disclosure Document, the standard franchise agreement may initially specify that it is governed by the laws of a state other than North Dakota. However, this is addressed in the North Dakota Addendum to the franchise agreement.
The North Dakota Addendum explicitly states that franchise agreements specifying governance by laws outside of North Dakota are considered unfair, unjust, or inequitable to North Dakota franchisees. To rectify this, the addendum mandates that the original clause in the franchise agreement (Clause 25.1) is deleted and replaced with a clause stating that the agreement will be interpreted and construed exclusively under the laws of the State of North Dakota.
For a prospective Chatime franchisee in North Dakota, this means the franchise agreement will be governed by North Dakota law, regardless of what the initial agreement states. This amendment ensures that North Dakota franchisees are protected under their state's laws and have access to local legal recourse if disputes arise.