In North Dakota, what determination has the Commissioner made regarding termination or liquidated damages for Chesters franchises?

According to Chesters's 2025 Franchise Disclosure Document, the North Dakota Commissioner has made a determination regarding termination or liquidated damages. Specifically, the Commissioner has determined that termination or liquidated damages are considered unfair, unjust, and inequitable under Section 51-19-09 of the North Dakota Franchise Investment Law. However, Chesters and the franchisee agree to enforce these provisions to the extent the law allows.

This determination by the North Dakota Commissioner impacts the enforceability of certain clauses within the franchise agreement. While Chesters intends to enforce termination and liquidated damages provisions, this is only to the extent permitted by North Dakota law. This means that if a court finds these provisions to be unfair, unjust, or inequitable, they may not be fully enforced.

For a prospective Chesters franchisee in North Dakota, this addendum offers a degree of protection against potentially harsh termination or liquidated damages. However, it's important to note that the agreement still aims to enforce these provisions where legally possible, so franchisees should carefully review these sections and understand their rights and obligations under North Dakota law. It would be prudent for a potential franchisee to seek legal counsel to fully understand the implications of this determination and how it affects their specific franchise agreement.