Does Chatime require North Dakota franchisees to consent to liquidated damages or termination penalties?

According to Chatime's 2025 Franchise Disclosure Document, North Dakota franchisees will not be required to consent to liquidated damages or termination penalties. This protection is explicitly stated in an addendum to the standard franchise agreement for North Dakota, addressing concerns raised by the North Dakota Securities Commissioner regarding potentially unfair or inequitable franchise agreement terms.

This provision means that Chatime franchisees in North Dakota are shielded from contract clauses that would automatically impose financial penalties for early termination or other breaches of the franchise agreement. Such clauses are often viewed as heavily favoring the franchisor, so this modification provides a more balanced legal framework for franchisees in North Dakota.

Prospective Chatime franchisees in North Dakota should carefully review the North Dakota addendum to the franchise agreement to fully understand their rights and obligations under the franchise agreement, as this addendum modifies several standard clauses to comply with North Dakota law.