To what extent is each provision in the Focus Cfo Addendum effective?
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
regulations for such laws as in effect at the relevant time.
Source: Item 23 — Receipts (FDD pages 37–126)
What This Means (2025 FDD)
According to the 2025 Focus Cfo Franchise Disclosure Document, the effectiveness of provisions within the Focus Cfo Addendum can vary, particularly concerning franchisees in North Dakota. The standard Franchise Agreement is modified by an addendum if a franchisee is a resident of North Dakota or if the franchise sale occurred there.
Specifically, Section 2.3.A of the Franchise Agreement, which likely contains releases or waivers, is entirely deleted for North Dakota franchisees. Furthermore, covenants not to compete, typically included in Section 14.3 of the agreement, are noted as generally unenforceable in North Dakota. This suggests that Focus Cfo franchisees in North Dakota may have more freedom to engage in competitive activities after the franchise term compared to franchisees in other states.
The FDD also states that the arbitration location, as detailed in Section 18.7, will be a mutually agreed-upon site between Focus Cfo and the franchisee, differing from a potentially pre-determined location in the standard agreement. Section 18.2 regarding jurisdiction is replaced, stipulating that any legal action (excluding those requiring arbitration) must be brought in North Dakota, although Focus Cfo can pursue injunctive relief where the franchisee is located. The governing law, outlined in Section 18.1, is also replaced, specifying that North Dakota law will govern the agreement, except where federal law applies, such as the U.S. Trademark Act. These modifications collectively tailor the franchise agreement to comply with North Dakota law and provide specific legal protections and stipulations for Focus Cfo franchisees operating in that state.