Does Desi District utilize restrictive covenants that may be subject to NDCC Section 9-08-06?

According to Desi District's 2024 Franchise Disclosure Document, the franchise agreement may contain restrictive covenants that could be subject to North Dakota Century Code (NDCC) Section 9-08-06. To address this, the FDD includes a North Dakota Rider that amends the franchise agreement to ensure compliance with North Dakota law. Specifically, the rider states that every contract by which a franchisee, any guarantor, or any other person is restrained from exercising a lawful profession, trade, or business of any kind is subject to NDCC Section 9-08-06. This means that any restrictive covenants in the Desi District franchise agreement will be interpreted and enforced in accordance with North Dakota law.

For prospective Desi District franchisees in North Dakota, this amendment is favorable. It clarifies that the restrictive covenants will be subject to state law, which aims to protect individuals from unreasonable restraints on their ability to work or conduct business. This provides a level of assurance that the covenants will be fairly applied and not overly broad or restrictive.

It is important for potential franchisees to carefully review the North Dakota Rider and understand how it modifies the standard franchise agreement. They should also consult with legal counsel to fully understand the implications of NDCC Section 9-08-06 and how it may affect their rights and obligations as a franchisee. This ensures that franchisees are aware of their rights and protections under North Dakota law regarding restrictive covenants.