What is the effect of signing the North Dakota Addendum to the Focus Cfo Franchise Agreement?
Focus_Cfo Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Background. Focus CFO and Franchisee are parties to that certain Franchise Agreement dated , 20 (the "Franchise Agreement") that has been signed concurrently with the signing of this Addendum. This Addendum is attached to and forms a part of the Franchise Agreement. This Addendum is being signed because (a) Franchisee is a resident of North Dakota and the franchised business that Franchisee will operate under the Franchise Agreement will be located in North Dakota and/or (b) any of the offering or sales activity relating to the Franchise Agreement occurred in North Dakota.
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- Releases. Section 2.3.A of the Franchise Agreement is deleted in its entirety.
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- Covenants Not to Compete. The following language is added to the end of Section 14.3:
Covenants not to compete such as those mentioned above are generally considered unenforceable in the State of North Dakota.
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- Arbitration. Section 18.7 of the Franchise Agreement is amended to provide that the location of arbitration shall be at a site to which Focus CFO and Franchisee agree.
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- Jurisdiction. Section 18.2 of the Franchise Agreement is deleted in its entirety and replaced with the following:
Any action brought by either party except those claims required to be submitted to arbitration, shall only be brought in the appropriate state or federal court located in North Dakota. Claims for injunctive relief may be brought by Focus CFO where Franchisee is located. This provision shall not restrict the ability of the parties to confirm or enforce judgments or arbitration awards in any appropriate jurisdiction.
- Governing Law. Section 18.1 of the Franchise Agreement is deleted in its entirety and replaced with the following:
Except to the extent this Agreement or any particular provision is governed by the U.S. Trademark Act of 1946 or other federal law, this Agreement shall be governed by and construed in accordance with the laws of the State of North Dakota (without reference to its conflict of laws principles). The Federal Arbitration Act shall govern all matters subject to arbitration. References to any law refers also to any successor laws and to any published
Source: Item 23 — Receipts (FDD pages 37–126)
What This Means (2025 FDD)
According to the 2025 Focus Cfo Franchise Disclosure Document, the North Dakota Addendum modifies certain sections of the standard Franchise Agreement for franchisees who are residents of North Dakota or whose franchise operations or sales activities occur in North Dakota. The addendum specifically addresses releases, covenants not to compete, arbitration, jurisdiction, and governing law to align with North Dakota state law.
Specifically, the addendum deletes Section 2.3.A of the Franchise Agreement, which pertains to releases. It also adds language to Section 14.3, acknowledging that covenants not to compete are generally considered unenforceable in North Dakota. The addendum amends Section 18.7 to specify that the location of arbitration will be mutually agreed upon by Focus Cfo and the franchisee.
Furthermore, Section 18.2 regarding jurisdiction is replaced, stipulating that any legal action (except those requiring arbitration) must be brought in a state or federal court located in North Dakota. Focus Cfo retains the right to seek injunctive relief where the franchisee is located, and the parties can enforce judgments or arbitration awards in any appropriate jurisdiction. Section 18.1 concerning governing law is also replaced, stating that the agreement will be governed by North Dakota law, except where federal law applies, such as the U.S. Trademark Act. The Federal Arbitration Act governs all matters subject to arbitration.
In effect, the North Dakota Addendum tailors the Focus Cfo Franchise Agreement to comply with North Dakota law, particularly regarding legal proceedings and enforceability of certain clauses. This ensures that the franchisee's rights are protected under North Dakota law and that legal disputes are handled within the state's jurisdiction.