What sections of The Standardx Franchise Agreement are modified by the Rider regarding termination penalties or liquidated damages?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
s to be unfair, unjust and inequitable within the intent of Section 51-19-09 of the North Dakota Franchise Investment Law. However, we and you agree to enforce these provisions to the extent the law allows.
- The following language is added to the end of the "Summary" sections of Item 17(c) of the Franchise Disclosure Document, titled Requirements for franchisee to renew or extend, and Item 17(m) of the Franchise Disclosure Document, titled "Conditions for franchisor approval of transfer by franchisee":
Any release will not apply to the extent prohibited by applicable law to claims arising under the North Dakota Franchise Investment Law.
- The "Summary" section of Item 17(u) of the Franchise Disclosure Document, titled Dispute resolution by arbitration or mediation, is deleted and replaced with the following:
Except for certain claims, we and you must arbitrate all disputes at a location the arbitrator chooses within 10 miles of our then current principal business address; however, to the extent required by the North Dakota Franchise investment Law (unless preempted by the Federal Arbitration Act), we and you will arbitrate at a site to which we and you mutually agree.
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- The following language is added to the end of the "Summary" section of Item 17(v) of the Franchise Disclosure Document, titled Choice of forum:
- ; however, to the extent required by applicable law, subject to your arbitration obligation, you may bring an action in North Dakota.
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- The following language is added to the end of the "Summary" section of Item 17(w) of the Franchise Disclosure Document, titled Choice of law:
Except for Federal Arbitration Act and other federal law, to the extent required by law, North Dakota law applies.
- The following paragraph is added to the end of Item 17 of the Franchise Disclosure Document:
No statement, questionnaire, or acknowledgement signed or agreed to by you in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by us, any franchise seller, or any other person acting on our behalf. This provision supersedes any other term of any document executed in connection with the franchise.
RHODE ISLAND
- The "Summary" section of Item 17(v) of the Franchise Disclosure Document, titled Choice of forum, is deleted and replaced with the following:
Subject to arbitration obligation, litigation generally must be in our home state, except as otherwise required by applicable law with respect to claims arising under the Rhode Island Franchise Investment Act.
- The "Summary" section of Item 17(w) of the Franchise Disclosure Document, titled Choice of law, is deleted and replaced with the following:
Except for Federal Arbitration Act and other federal law, Illinois law generally applies, except as otherwise required by law for claims which arise under the Rhode Island Franchise Investment Act.
3.
Source: Item 18 — OTHER INCOME (LOSS), NET (FDD pages 187–399)
What This Means (2025 FDD)
According to The Standardx's 2025 Franchise Disclosure Document, the Rider modifies specific sections of the Franchise Agreement concerning termination penalties and liquidated damages, particularly for franchisees in Minnesota and North Dakota. For Minnesota franchisees, the Rider addresses waivers of punitive damages. Specifically, Section 14.5 of the Franchise Agreement is deleted if required by the Minnesota Franchises Law.
For North Dakota franchisees, the Rider includes modifications to Item 6 and Item 17 of the FDD. Regarding Item 6, language is added to the "Remarks" column of the chart for "Royalty fee upon termination," "Liquidated damages upon condemnation," and "Liquidated damages upon termination," stating that the Commissioner has determined these damages to be unfair but that The Standardx and the franchisee agree to enforce them to the extent the law allows.
The Rider also modifies sections of Item 17, including adding language to the summaries regarding requirements for renewal or extension and conditions for franchisor approval of transfer, ensuring any release does not waive rights under North Dakota Franchise Investment Law. Additionally, the dispute resolution section is modified, requiring arbitration within a specific distance of The Standardx's principal business address unless otherwise required by North Dakota law. The Rider also adds language to the choice of forum and choice of law sections, allowing actions to be brought in North Dakota and applying North Dakota law to the extent required.