In North Dakota, what must parties agree on regarding arbitration or mediation for Itan franchises?

According to Itan's 2025 Franchise Disclosure Document, if a franchisee purchases a franchise in North Dakota, the parties involved in arbitration or mediation must agree on the location where these proceedings will take place. This requirement stems from Section 51-19-09 of the North Dakota Franchise Investment Law, which generally considers provisions that mandate remote arbitration or mediation sites unenforceable.

For a prospective Itan franchisee in North Dakota, this means that the standard franchise agreement's arbitration or mediation clause might not be fully enforceable if it designates a location far from the franchisee's business. Instead, the franchisee and Itan must reach a mutual agreement on a suitable site for these proceedings. This provides a degree of protection to the franchisee, ensuring that they are not forced to participate in dispute resolution in an inconvenient or cost-prohibitive location.

This stipulation is particularly important because it addresses a potential power imbalance between the franchisor and franchisee. Without this protection, Itan could theoretically impose an arbitration or mediation location that would place a significant burden on the franchisee, potentially discouraging them from pursuing legitimate claims. By requiring mutual agreement, North Dakota law aims to level the playing field and ensure fairer dispute resolution processes. Franchisees should carefully review the franchise agreement and any supplemental agreements to ensure compliance with this requirement.