Franchisors selling in North Dakota must register their Franchise Disclosure Document with the North Dakota Securities Commissioner before any franchise offering or sale in the state. That is the baseline requirement under North Dakota Century Code Chapter 51-19. But the compliance obligation that demands the most careful legal attention is not the registration process itself. It is the modification of the franchise agreement’s post-termination non-compete provisions to comply with NDCC Section 9-08-06, which makes those clauses generally unenforceable in North Dakota. Every franchisor entering or already operating in North Dakota needs to understand both dimensions of this compliance obligation.

This guide covers the full North Dakota franchise registration process: required documents, fees, the North Dakota addendum and what it must include, relationship law compliance, renewal obligations, penalties for non-compliance, and strategic considerations for franchisors whose systems rely heavily on post-term non-competes.

How Do I Register My Franchise in North Dakota?

The North Dakota franchise registration process is administered by the North Dakota Securities Commissioner, part of the North Dakota Department of Securities. The process follows the standard registration model used by most of the 14 registration states, with one critical North Dakota-specific modification requirement around non-competes.

Step-by-Step Registration Process

1. Prepare your FDD and exhibits: Your FDD must comply with the FTC Franchise Rule’s current format and disclosure requirements. All 23 Items must be complete, current, and accurate. Exhibits include the franchise agreement, financial statements, and all other required attachments.
2. Draft the North Dakota addendum: Before submitting, prepare the North Dakota addendum to the FDD and franchise agreement. This addendum must address relationship law requirements under NDCC Section 51-19-09 and, critically, must modify or delete the post-termination non-compete provisions in the franchise agreement. See the addendum section below for full detail.
3. Compile the registration package: Assemble the registration application form, FDD, franchise agreement with the North Dakota addendum, all exhibits, and the $250 filing fee.
4. Submit to the Securities Commissioner: File the complete package with the North Dakota Department of Securities. Filing can typically be done by mail or through the appropriate state filing portal.
5. Respond to comments: The Securities Commissioner reviews the submission and may issue comment letters requesting corrections or additional disclosure. Promptly respond to any comments to avoid delays.
6. Receive registration: Once the Commissioner approves the registration, you may offer and sell franchises in North Dakota. Do not sell prior to receiving approval.

Plan for an estimated 4 to 8 weeks for the review process, though timing varies based on the Commissioner’s workload and whether comments are issued. At Lopes Law LLC, we prepare North Dakota registration packages as part of multi-state registration engagements, typically handling ND registration simultaneously with other registration states in a franchisors’ target market.

What Are the Filing Fees and Renewal Requirements?

Item	Fee / Requirement
Initial registration fee	$250
Annual renewal fee	$100
Registration authority	North Dakota Securities Commissioner
Governing statute	NDCC Chapter 51-19
FDD delivery timing	10 business days before signing or payment
Annual renewal deadline	Before current registration expires; file updated FDD

The $250 initial fee and $100 annual renewal fee are among the lowest of any registration state. For comparison, California’s initial registration fee is $675, and Illinois charges $500. North Dakota’s lower fee structure reflects a smaller market, but the compliance obligations around the non-compete ban are equally serious and require the same level of legal attention as higher-fee states.

Annual renewal requires filing an updated FDD that reflects any material changes to the franchise system during the prior year. Material changes include changes to fees, territory terms, litigation disclosures, financial statements, or any other information that would affect a franchisee’s investment decision. Franchisors that experience material changes mid-year may also need to file an amendment before the annual renewal date.

What Must the North Dakota Addendum Include?

The North Dakota addendum to the FDD and franchise agreement is a required component of the registration package. It serves two essential functions: incorporating the relationship law protections of NDCC Section 51-19-09 into the parties’ agreement, and modifying the franchise agreement to comply with NDCC Section 9-08-06’s ban on post-termination non-competes.

Relationship Law Provisions (NDCC Section 51-19-09)

The addendum must reflect the following relationship law requirements that apply to franchises operating in North Dakota:

• Good cause for termination: The franchisor may not terminate the franchise agreement without good cause. Good cause means a material breach of the franchise agreement after notice and a reasonable opportunity to cure. The addendum must modify any franchise agreement provision allowing termination without good cause.
• Transfer rights: The franchisee has the right to transfer the franchise with the franchisor’s approval, which the franchisor may not unreasonably withhold. The addendum must reflect a reasonableness standard for transfer approvals, even if the franchise agreement grants the franchisor broader discretion.
• North Dakota law governs: The addendum should include a provision stating that to the extent the franchise agreement conflicts with North Dakota franchise law, North Dakota law controls for franchises operating in the state.

The Non-Compete Modification: The Most Critical Addendum Requirement

This is where North Dakota franchise compliance is fundamentally different from most other registration states. NDCC Section 9-08-06 declares void any contract restraining a person from exercising a lawful profession, trade, or business, with very limited exceptions that do not apply to typical post-termination franchise non-compete provisions.

In plain terms: the standard post-termination non-compete clause in a franchise agreement, which typically prevents the former franchisee from operating a competing business within a certain radius for a period of time after the franchise ends, is generally unenforceable against a North Dakota franchisee.

The North Dakota addendum to the franchise agreement must address this by:

• Modifying or deleting the post-termination non-compete covenant to state that it is not enforceable in North Dakota, or that it does not apply to franchisees operating in North Dakota.
• Clearly identifying which provisions of the standard franchise agreement are modified by the addendum and how.
• Ensuring the FDD disclosure in Item 17 reflects the non-compete limitation in North Dakota.

What Are the Penalties for Non-Compliance?

Selling franchises in North Dakota without a valid registration, or selling with an FDD that materially fails to comply with NDCC Chapter 51-19, exposes the franchisor to serious consequences:

• Franchisee rescission rights: A franchisee who purchased without a properly registered and delivered FDD may have the right to rescind the franchise agreement and receive a refund of all amounts paid, plus interest and attorney fees.
• Civil damages: North Dakota’s franchise investment law provides for civil liability including actual damages suffered by the franchisee as a result of the violation.
• Securities Commissioner enforcement: The Securities Commissioner has authority to bring civil enforcement actions against franchisors who violate the statute, including injunctive relief and civil penalties.
• Reputational damage: Enforcement actions in registration states become part of the public record. They must be disclosed in Item 3 of the FDD in future registrations, affecting the franchisor’s ability to expand in other states.

Are There Exemptions from North Dakota Franchise Registration?

North Dakota provides some exemptions from the registration requirement. Common exemptions in registration states typically include transactions with sophisticated investors, franchise renewals meeting certain conditions, and situations involving franchisors with substantial financial strength. The specific exemptions available under NDCC Chapter 51-19 are fact-specific and require careful legal analysis.

Do not assume an exemption applies without a written legal opinion confirming it. The downside risk of a failed exemption claim, which includes franchisee rescission rights and civil liability, is too significant to rely on a general assumption. At Lopes Law LLC, we assess exemption eligibility for every new state market before recommending registration or exemption reliance.

Strategic Implications: When Your System Relies on Post-Term Non-Competes

For franchisors in certain industries, post-termination non-compete clauses are a core brand protection mechanism. They prevent former franchisees from operating competing businesses in the same territory, protecting both current franchisees and the overall system. North Dakota’s non-compete ban requires franchisors to think carefully about how they will protect the system in the absence of this tool.

Alternative protections that remain enforceable in North Dakota include:

• Confidentiality and trade secret protections: Franchisees acquire confidential business information during the franchise relationship. Confidentiality covenants and trade secret law provide protection for this information even without a non-compete. Well-drafted confidentiality provisions are enforceable in North Dakota.
• Non-solicitation of employees and customers: Prohibiting former franchisees from actively recruiting the franchisor’s current employees or soliciting current customers may be enforceable even where a non-compete is not. These are narrower restrictions targeting specific conduct rather than broad industry exclusion.
• Trademark enforcement: A former franchisee cannot continue using the franchisor’s trademarks, trade dress, or proprietary system after the franchise ends. Trademark law provides strong protection against former franchisees operating as if they were still part of the system.
• In-term non-competition: Non-compete restrictions during the term of the franchise agreement have a stronger basis for enforcement than post-termination restrictions, though careful legal review is still warranted.

Franchisors entering North Dakota for the first time should consult with franchise counsel to assess whether the non-compete limitation creates material risk for their system and what contractual and operational adjustments are appropriate.

North Dakota in Your Multi-State Registration Strategy

North Dakota’s relatively low filing fees and straightforward registration process make it one of the easier registration states to navigate from a procedural standpoint. But the non-compete issue means it cannot be treated as a simple check-the-box registration. It requires substantive modification of the franchise agreement’s post-termination provisions, with corresponding FDD disclosure in Item 17.

For franchisors doing a multi-state registration rollout, we typically process North Dakota registration simultaneously with neighboring registration states in the Midwest region. North Dakota’s registration timeline (4 to 8 weeks) is generally shorter than California or New York, making it one of the faster states to open once the compliance work is done.

For a broader overview of all 14 registration states, including comparison of fees, timing, and relationship law protections, see our Franchise Registration States: The Complete 2026 Guide. For the franchisee perspective on North Dakota, see Buying a Franchise in North Dakota: Your Rights and Protections. For general guidance on the franchise registration and development process, see our guide on How to Franchise Your Business.

For cost context, see our post on How Much Does a Franchise Lawyer Cost in 2026 for a full breakdown of state registration legal fees.

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