Is an All States M.E.D. franchisee in Minnesota allowed to consent to liquidated damages?
All_States_M_E_D Franchise · 2024 FDDAnswer from 2024 FDD Document
MINNESOTA ADDENDUM TO THE FRANCHISE AGREEMENT
If any of the terms of the Franchise Agreement are inconsistent with the terms below, the terms below control.
- Minn. Stat. §80C.21 and Minn. Rule 2860.4400(J) prohibit the franchisor from requiring litigation to be conducted outside 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 Franchise Disclosure Document or agreements can abrogate or reduce (1) any of the franchisee's rights as provided for in Minnesota Statutes, Chapter 80C, or (2) franchisee's rights to any procedure, forum, or remedies provided for by the laws of the jurisdiction.
Source: Item 23 — RECEIPTS (FDD pages 44–174)
What This Means (2024 FDD)
According to the 2024 All States M.E.D. Franchise Disclosure Document, Minnesota franchisees are protected from being required to consent to liquidated damages. The Minnesota Addendum to the Franchise Agreement explicitly states that Minnesota Statutes and Rules prohibit All States M.E.D. from requiring franchisees to consent to liquidated damages. This protection is in place to ensure that the franchisee's rights under Minnesota law are not diminished or waived through the franchise agreement.
This provision means that All States M.E.D. franchisees in Minnesota cannot be forced to agree in advance to a specific amount of monetary damages in the event of a breach of contract. This is a significant benefit for franchisees, as it prevents the franchisor from imposing potentially unfair or excessive penalties. Instead, any damages would need to be determined through a fair legal process, taking into account the actual harm suffered.
Prospective All States M.E.D. franchisees in Minnesota should be aware of this protection and ensure that the franchise agreement complies with Minnesota law. This addendum serves to modify any conflicting terms in the standard franchise agreement, providing additional safeguards for franchisees operating within the state of Minnesota. Franchisees should consult with a legal professional to fully understand their rights and obligations under the franchise agreement and Minnesota law.