Under what circumstances does the confidentiality section of the Marble Slab Creamery agreement NOT apply?
Marble_Slab_Creamery Franchise · 2025 FDDAnswer from 2025 FDD Document
The Securities Commissioner has held the following to be unfair, unjust or inequitable to North Dakota franchisees (Section 51-19-09, N.D.C.C.):
- a. Restrictive Covenants: Franchise disclosure documents which disclose the existence of covenants restricting competition contrary to Section 9-08-06, N.D.C.C., without further disclosing that such covenants will be subject to this statute.
- b. Situs of Arbitration Proceedings: Franchise Agreements providing that the parties must agree to the arbitration of the disputes at a location that is remote from the site of the franchisee's business.
- c. Restriction on Forum: Requiring North Dakota franchisees to consent to the jurisdiction of courts outside of North Dakota.
- d. Liquidated Damages and Termination Penalties: Requiring North Dakota Franchisees to consent to liquidated damages or termination penalties.
- e. Applicable Laws: Franchise Agreements which specify that they are to be governed by the laws of a state other than North Dakota.
- f. Waiver of Trial by Jury: Requiring North Dakota franchisees to consent to the waiver of a trial by jury.
- g. Waiver of Exemplary & Punitive Damages: Requiring North Dakota franchisees to consent to a waiver of exemplary and punitive damages.
- h. General Release: Franchise Agreements that require the franchisee to sign a general release upon renewal of the Franchise Agreement.
- i. Limitation of Clai
Source: Item 23 — RECEIPT (FDD pages 101–346)
What This Means (2025 FDD)
Based on the 2025 Marble Slab Creamery Franchise Disclosure Document addendum for the state of North Dakota, the Securities Commissioner has determined certain conditions to be unfair, unjust, or inequitable to North Dakota franchisees. These conditions effectively limit the enforceability of certain clauses within the franchise agreement.
Specifically, restrictive covenants that restrain competition, especially those running contrary to Section 9-08-06 of the North Dakota Century Code, must be disclosed with the understanding that they are subject to this statute. The agreement cannot force franchisees to arbitrate disputes in locations remote from their business site, require North Dakota franchisees to consent to the jurisdiction of courts outside of North Dakota, or mandate consent to liquidated damages or termination penalties.
Additionally, Marble Slab Creamery cannot specify that the franchise agreements are governed by laws of a state other than North Dakota. Franchisees cannot be compelled to waive a trial by jury or waive exemplary and punitive damages. Finally, the agreement cannot require franchisees to sign a general release upon renewal of the Franchise Agreement, and there can be no limitation of claims.