North Dakota is a franchise registration state governed by North Dakota Century Code Chapter 51-19, the North Dakota Franchise Investment Law. Before any franchisor can offer or sell a franchise in the state, they must register the FDD with the North Dakota Securities Commissioner. But the headline issue in North Dakota franchise law is not the registration process itself. It is the state’s near-absolute ban on post-termination non-compete agreements under NDCC Section 9-08-06. This single provision changes the post-termination landscape for every franchise system operating in North Dakota and affects both franchisors and franchisees in significant ways.

Whether you are a franchisor expanding into North Dakota or a prospective franchisee considering a North Dakota location, this guide covers everything you need to know: registration requirements, fees, timing, relationship law protections, and the critical non-compete issue that makes North Dakota unlike most other states.

Is North Dakota a Franchise Registration State?

Yes. North Dakota is one of 14 states that require franchisors to register their Franchise Disclosure Document with a state regulator before offering or selling franchises in the state. The governing statute is North Dakota Century Code Chapter 51-19, and the registration authority is the North Dakota Securities Commissioner, housed within the North Dakota Department of Securities.

This means that the federal FTC Franchise Rule alone is not sufficient for selling franchises in North Dakota. The FTC Rule requires franchisors to prepare and deliver an FDD, but it does not require registration. North Dakota adds a state-level registration layer: the FDD must be reviewed and approved by the Securities Commissioner before any franchise sales activity can occur.

Franchisors who skip registration and sell franchises in North Dakota anyway face significant civil and potentially criminal liability. The North Dakota Franchise Investment Law provides for rescission rights, damages, and attorney fees for franchisees who purchased without a properly registered FDD.

How Does North Dakota Franchise Registration Work?

The registration process in North Dakota follows the standard model used by most registration states. The franchisor submits a registration application to the Securities Commissioner along with the FDD, the franchise agreement, and all required exhibits. The Commissioner reviews the materials and may issue comments requiring corrections or additional disclosure before granting registration.

Key Registration Details

Requirement	North Dakota Rule
Governing statute	NDCC Chapter 51-19 (North Dakota Franchise Investment Law)
Registration authority	North Dakota Securities Commissioner
Initial filing fee	$250
Annual renewal fee	$100
FDD delivery timing	At least 10 business days before signing or payment
State addendum required	Yes: ND Addendum to FDD and Franchise Agreement
Relationship law	Yes: NDCC Section 51-19-09

Annual renewal must be filed before the registration expires. Franchisors operating in North Dakota need to track renewal deadlines carefully. A lapse in registration means the franchisor cannot legally sell new franchises in the state until renewed, and any sale during a lapse period may expose the franchisor to rescission liability.

What Are the Disclosure Timing Requirements?

North Dakota requires that the FDD be delivered to the prospective franchisee at least 10 business days before the franchisee signs any binding agreement or pays any money to the franchisor. This waiting period is designed to give buyers adequate time to review the disclosure materials, consult with an attorney, and make an informed decision.

The 10-business-day rule applies from the date of first delivery of the FDD, not from the date of any subsequent updates. If the franchisor amends the FDD after delivery, a new waiting period may be triggered depending on the nature of the amendment. Franchisors managing multi-state sales pipelines need to track these deadlines carefully to avoid inadvertent violations.

At Lopes Law LLC, we advise franchisee clients to use every day of the waiting period productively: getting the FDD to a franchise attorney as early as possible in the process, not waiting until day nine to schedule a review.

What Is the North Dakota Franchise Relationship Law?

North Dakota Century Code Section 51-19-09 provides relationship law protections for franchisees operating in North Dakota. This is a significant feature of North Dakota franchise law that goes beyond simple disclosure requirements.

The relationship law provisions under NDCC Section 51-19-09 include:

• Good cause required for termination: A franchisor cannot terminate a North Dakota franchise agreement without good cause. This protects franchisees from arbitrary or pretextual terminations, even if the franchise agreement itself would otherwise permit termination on shorter grounds.
• Transfer rights: Franchisees generally have the right to transfer their franchise with reasonable approval from the franchisor. The franchisor cannot unreasonably withhold consent to a transfer, which is important for franchisees planning an exit or estate succession.
• Reasonable approval standards: The reasonableness standard for both termination and transfer decisions gives franchisees a meaningful legal backstop that pure FTC Rule compliance does not provide.

These protections mean that even a franchise agreement drafted entirely in the franchisor’s favor cannot override the minimum protections of NDCC Section 51-19-09 for franchises operating in North Dakota. The state law floors cannot be contracted away.

What Makes North Dakota Different: The Non-Compete Ban Under NDCC Section 9-08-06

This is the most important thing to understand about North Dakota franchise law, for both franchisors and franchisees.

North Dakota Century Code Section 9-08-06 contains one of the strongest bans on non-compete agreements in the entire United States. The statute makes any contract by which a person is restrained from exercising a lawful profession, trade, or business void as against public policy, subject to very narrow exceptions. Those narrow exceptions do not typically apply to post-termination non-compete clauses in franchise agreements.

In practical terms: post-termination non-compete covenants in franchise agreements are generally unenforceable in North Dakota. If a franchise agreement contains a clause saying that after the franchise ends, the franchisee cannot operate a competing business within X miles for Y years, that clause is likely void under North Dakota law.

What This Means for Franchisors

Franchisors relying on post-termination non-competes to protect their system from former franchisees converting to competitors need to understand that those protections do not carry the same force in North Dakota as they do in most other states. This has real implications:

• A terminated or expired franchisee in North Dakota may legally open a competing business immediately after the franchise ends.
• The North Dakota addendum to the franchise agreement must address this by modifying or deleting the post-termination non-compete provisions, and the FDD must disclose this limitation.
• Franchisors need to consider whether their brand protection strategy relies too heavily on non-competes, and whether alternative protections (trade secret law, confidentiality agreements, non-solicitation of employees) can fill the gap in North Dakota.

What This Means for Franchisees

For franchisees in North Dakota, NDCC Section 9-08-06 is one of the most valuable protections available. It means that when your franchise ends, whether by expiration, termination, or voluntary exit, the franchisor generally cannot enforce a post-term non-compete to prevent you from working in your industry or opening a competing business.

This is a meaningful departure from most states, where post-term non-competes in franchise agreements are regularly enforced. North Dakota franchisees have far more freedom after the franchise relationship ends.

What Does the North Dakota FDD Addendum Require?

The North Dakota addendum to the FDD and franchise agreement is required as part of the state registration process. The addendum serves two main functions: it incorporates the relationship law protections of NDCC Section 51-19-09 into the parties’ agreement, and it modifies or removes the post-termination non-compete provisions that would otherwise be unenforceable in North Dakota.

A properly drafted North Dakota addendum should address:

• The good cause standard for termination required by NDCC Section 51-19-09
• Transfer rights and the reasonableness standard for franchisor approval
• Modification or deletion of post-termination non-compete covenants to reflect NDCC Section 9-08-06
• A statement that to the extent the franchise agreement conflicts with North Dakota law, North Dakota law controls
• Any other state-specific disclosure modifications required by the Securities Commissioner

The addendum is not optional and not boilerplate. A poorly drafted addendum that leaves the non-compete clause intact, even if technically modified, can create enforcement disputes. At Lopes Law LLC, we review the North Dakota addendum as part of every FDD review for franchisees considering North Dakota locations.

How Does North Dakota Compare to the Federal FTC Rule?

The federal FTC Franchise Rule sets a national baseline: franchisors must prepare an FDD covering 23 required items and deliver it to prospective franchisees before any sale. The FTC Rule does not require state registration. It does not impose relationship law protections. And it says nothing about non-compete enforceability.

North Dakota’s law goes significantly further in several respects:

• Registration requirement: North Dakota requires state registration and review before any franchise sales, which the FTC Rule does not.
• Relationship law: North Dakota’s NDCC Section 51-19-09 provides good cause termination and transfer protections that the FTC Rule does not address.
• Non-compete ban: NDCC Section 9-08-06 renders post-term non-competes generally unenforceable, a protection that does not exist under federal law and does not exist in most other states.
• Disclosure timing: North Dakota’s 10-business-day requirement is consistent with the FTC Rule’s updated timing standards.

For both franchisors and franchisees, this layering of state law on top of the federal floor is what makes professional legal guidance so valuable in registration states like North Dakota.

Are There Exemptions from North Dakota Franchise Registration?

Yes, North Dakota provides some exemptions from the full registration requirement, similar to other registration states. Exemptions typically apply to franchisors who meet certain financial thresholds, to transactions involving sophisticated buyers, or to renewal and extension situations. However, exemptions are fact-specific and require careful legal analysis. A franchisor that believes it qualifies for an exemption should have franchise counsel verify that position in writing before proceeding without registration.

At Lopes Law LLC, we counsel franchisors on whether a North Dakota exemption applies to their specific situation and, when it does not, guide them through the registration process efficiently.

Anthony Lopes, Esq. notes that the exemption analysis in North Dakota is more nuanced than in some other states because even when the registration exemption applies, the non-compete ban under NDCC Section 9-08-06 still applies. A franchisor selling under a registration exemption must still modify its franchise agreement to address the non-compete issue for North Dakota franchisees. The exemption excuses registration with the Securities Commissioner, but it does not override the substantive law provisions that make post-termination non-competes unenforceable in the state.

Practical Advice: What Franchisors and Franchisees Should Do Before Operating in North Dakota

For Franchisors

• Register the FDD with the North Dakota Securities Commissioner before any franchise sales activity in the state.
• Prepare a North Dakota addendum that specifically addresses the non-compete limitation under NDCC Section 9-08-06 and the relationship law requirements of NDCC Section 51-19-09.
• Do not rely on post-termination non-competes as a primary brand protection mechanism in North Dakota. Strengthen confidentiality and trade secret protections as alternative safeguards.
• Track annual renewal deadlines to avoid registration lapses.
• See also our guide: North Dakota Franchise Compliance for Franchisors for the full step-by-step registration process.

For Franchisees

• Confirm that the franchisor is registered with the North Dakota Securities Commissioner before signing anything or paying any money.
• Review the North Dakota addendum carefully. Make sure it modifies the post-termination non-compete provisions consistent with NDCC Section 9-08-06.
• Understand your relationship law protections under NDCC Section 51-19-09, particularly the good cause standard for termination.
• See also our guide: Buying a Franchise in North Dakota: Your Rights and Protections for a full explanation of franchisee protections in the state.

For a broader overview of all registration states and how they compare, see our Franchise Registration States: The Complete 2026 Guide.

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