Regarding a Mrcool franchise in North Dakota, under what circumstances is a provision in the Franchise Agreement designating jurisdiction or venue outside of North Dakota considered void?

According to Mrcool's 2025 Franchise Disclosure Document, a provision in the Franchise Agreement that designates jurisdiction or venue, or requires a franchisee to agree to jurisdiction or venue, in a forum outside of North Dakota is void. This applies specifically to any cause of action that is otherwise enforceable in North Dakota. This amendment is put in place to protect the substantive rights afforded to North Dakota residents under North Dakota law, ensuring that franchisees do not waive these rights.

This means that if a Mrcool franchisee in North Dakota has a legal dispute that can be pursued within the state's legal system, any clause in the franchise agreement that forces them to resolve the dispute in another state is not enforceable. The intention is to prevent Mrcool from imposing unfair or inequitable conditions that would disadvantage the franchisee due to geographical distance or unfamiliarity with the legal system of another state.

This protection is rooted in Section 51-19-09 of the North Dakota Franchise Investment Law, which aims to ensure fairness in franchise agreements. By invalidating out-of-state jurisdiction clauses, North Dakota seeks to maintain a level playing field where franchisees can effectively assert their rights without facing undue burdens. Prospective franchisees should be aware of this provision as it offers a significant safeguard against potentially onerous legal proceedings in distant locations.