Does Fly To Fit's franchise agreement require franchisees to consent to a limitation of claims?
Fly_To_Fit Franchise · 2024 FDDAnswer from 2024 FDD Document
, or provision in the Waivers of New York Law Deleted. to waive compliance by Fly To Fit Franchise Agreement purporting to bind Franchisee with any deleted. provision of New York General Business Law, or any rule promulgated thereunder, is hereby 4. Governing Law. Notwithstanding any provision of the Agreement to the contrary, the New York Franchises Law shall govern any claim arising under that law. 5. Effective Date. This Rider is effective as of the Effective Date. Agreed to by: FLY TO FIT FRANCHISE, LLC Date:
Date:
NORTH DAKOTA RIDER TO FRANCHISE AND MULTI-UNIT DEVELOPMENT AGREEMENT
This Rider amends the Franchise and Multi-Unit Development Agreement dated (the "Agreement"), between Fly To Fit Franchise, LLC, a Delaware Limited Liability Company ("Fly To Fit Franchise") and, a ("Franchisee").
- 1. Definitions. Capitalized terms used but not defined in this Rider have the meanings given in the Agreement.
- 2. Amendments. The Agreement (and any Guaranty Agreement) is amended to comply with the following:
- (1) Restrictive Covenants: Every contract by which 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.
- (2) Situs of Arbitration Proceedings: Franchisee and any Guarantor are not required to agree to the arbitration of disputes at a location that is remote from the site of Franchisee's business.
- (3) Restrictions on Forum: Franchisee and any Guarantor are not required to consent to the jurisdiction of courts outside of North Dakota.
- (4) Liquidated Damages and Termination Penalties: Franchisee is not required to consent to liquidated damages or termination penalties.
- (5) Applicable Laws: The Agreement (and any Guaranty Agreement) is governed by the laws of the State of North Dakota.
- (6) Waiver of Trial by Jury: Franchisee and any Guarantor do not waive a trial by jury.
- (7) Waiver of Exemplary and Punitive Damages: The parties do not waive exemplary and punitive damages.
- (8) General Release: Franchisee and any Guarantor are not required to sign a general release upon renewal of the Agreement.
- (9) Limitation of Claims: Franchisee is not required to consent to a limitation of claims.
Source: Item 23 — RECEIPTS (FDD pages 44–134)
What This Means (2024 FDD)
According to Fly To Fit's 2024 Franchise Disclosure Document, the standard franchise agreement may be modified by state-specific riders. For example, the North Dakota Rider to the Franchise and Multi-Unit Development Agreement explicitly states that franchisees are not required to consent to a limitation of claims, and that the statute of limitations under North Dakota law applies.
In contrast, the Minnesota Rider includes a provision addressing limitations of claims, stating that the Limitations of Claims section must comply with Minnesota Statutes, Section 80C.17, Subd. 5. Therefore, the applicable provision of the Agreement is amended to state "No action may be commenced pursuant to Minnesota Statutes, Section 80C.17 more than three years after the cause of action accrues."
These riders indicate that the enforceability and specific terms regarding limitations of claims can vary significantly depending on the franchisee's location. Prospective franchisees should carefully review any state-specific riders applicable to their location and consult with legal counsel to understand the implications of these provisions in their specific jurisdiction.