Is All Team prohibited from requiring a franchisee to consent to termination penalties in Minnesota?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
Notwithstanding anything contained in the foregoing Franchise Agreement and Franchise Disclosure Document ("FDD") to the contrary, the following provisions of the Minnesota Franchise Act shall apply to any franchise or franchisee located in the State of Minnesota, which shall control to the extent of any inconsistency:
MINN.
STAT.
SECTION 80C.21 and MINNESOTA RULES 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.
Source: Item 22 — CONTRACTS (FDD pages 33–34)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, if a franchise is located in Minnesota, All Team is prohibited from requiring the franchisee to consent to termination penalties. This protection is explicitly stated under the Minnesota Franchise Act.
This means that All Team franchisees in Minnesota cannot be forced to agree to clauses that impose financial penalties if the franchise agreement is terminated. This provision aims to protect franchisees from potentially unfair or overly burdensome financial repercussions in the event of termination.
This protection is one of several specific stipulations outlined in the FDD that apply to Minnesota franchises, ensuring that the franchisee's rights are upheld in accordance with Minnesota state law. These stipulations take precedence over any conflicting terms in the standard franchise agreement, providing additional security for franchisees operating in Minnesota.