In Minnesota, can a 360 Painting franchisee consent to liquidated damages?
360_Painting Franchise · 2025 FDDAnswer from 2025 FDD Document
Minn. Stat. Sec. 80C.21 and Minn. Rule 2860.4400J prohibit us from requiring litigation to be conducted outside of Minnesota, requiring waiver of a jury trial or requiring the franchisee to consent to liquidated damages, termination penalties or judgment notes. In addition, nothing in the Disclosure Document shall abrogate or reduce any of your rights as provided for in Minn. Stat. Sec. 80C, or your rights to any procedure, forum or remedies provided for by the laws of the jurisdiction.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 42–46)
What This Means (2025 FDD)
According to the 2025 360 Painting Franchise Disclosure Document, Minnesota franchisees are protected by the Minnesota Franchise Act. Specifically, Minnesota Statute Section 80C.21 and Minnesota Rule 2860.4400J prevent 360 Painting from requiring franchisees to consent to liquidated damages. This means that the franchise agreement cannot force a franchisee to agree in advance to a specific amount of monetary damages in case of a breach of contract.
This protection ensures that Minnesota franchisees are not pressured into accepting potentially unfair or excessive penalties. It also means that any dispute over damages would need to be resolved through negotiation or litigation, where the actual harm suffered would be a key factor in determining the appropriate amount.
In addition to liquidated damages, Minnesota law also prohibits 360 Painting from requiring litigation to be conducted outside of Minnesota or requiring waiver of a jury trial. These provisions collectively aim to safeguard the legal rights and recourse options available to franchisees operating within the state.