In North Dakota, can Dryer Vent Squad require liquidated damages from franchisees?

According to the 2024 Dryer Vent Squad Franchise Disclosure Document, Dryer Vent Squad cannot require franchisees in North Dakota to consent to termination or liquidated damages. This protection is explicitly stated in an amendment to Item 6, "Other Fees," which supplements the original item with the condition that "No consent to termination or liquidated damages shall be required from franchisees in the State of North Dakota."

This provision is further reinforced by an amendment to Item 17, "Renewal, Termination, Transfer and Dispute Resolution," which states that "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." This means that any clause in the franchise agreement that mandates a franchisee's agreement to termination terms or liquidated damages is considered invalid under North Dakota law.

For a prospective Dryer Vent Squad franchisee in North Dakota, this is a significant benefit. It means that the franchisee cannot be forced to agree in advance to specific financial penalties or termination conditions that might be unfavorable. This provides an added layer of protection under the North Dakota Franchise Investment Law, ensuring that franchisees are not subjected to unfair or inequitable terms regarding termination or financial liabilities.