In North Dakota, does a Mr. Sandless franchisee have to consent to termination or liquidated damages?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
Item 17(i) of the Disclosure Document, Article 22 of the Franchise Agreement requires the franchisee to consent to termination or liquidated damages.
Since the Commissioner has determined this to be unfair, unjust and inequitable within the intent of Section 51-19-09 of the North Dakota Franchise Investment Law, these provisions are hereby deleted in each place they appear in the Disclosure Document and Franchise Agreement used in North Dakota.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 30–34)
What This Means (2025 FDD)
According to the 2025 Mr. Sandless FDD, franchisees in North Dakota are not required to consent to termination or liquidated damages. The state-specific addendum for North Dakota explicitly amends Item 17(i) of the Disclosure Document and Article 22 of the Franchise Agreement, which initially required franchisees to consent to these terms.
The FDD states that the Commissioner determined that requiring consent to termination or liquidated damages is unfair, unjust, and inequitable under Section 51-19-09 of the North Dakota Franchise Investment Law. As a result, these provisions are deleted from both the Disclosure Document and the Franchise Agreement for Mr. Sandless franchises operating in North Dakota.
This amendment provides a significant benefit to Mr. Sandless franchisees in North Dakota, as it protects them from being forced to agree to potentially unfavorable terms regarding termination and financial penalties. Prospective franchisees in North Dakota can be assured that they will not be bound by these specific requirements, offering them greater protection under the state's franchise laws.