Can All Team require a franchisee in Minnesota to consent to liquidated damages?

According to All Team's 2025 Franchise Disclosure Document, if a franchisee is located in Minnesota, All Team is prohibited from requiring the franchisee to consent to liquidated damages. This protection is explicitly stated in the Minnesota State Law Addendum within the FDD. This addendum clarifies that the provisions of the Minnesota Franchise Act will supersede any conflicting terms in the standard Franchise Agreement or Franchise Disclosure Document.

Specifically, MINN. STAT. SECTION 80C.21 and MINNESOTA RULES 2860.4400(J) explicitly prohibit All Team from requiring a franchisee in Minnesota to consent to liquidated damages. This means that All Team cannot include clauses in its franchise agreement that would force a Minnesota franchisee to agree to pay a predetermined amount of damages in the event of a breach of contract or termination.

This protection is significant for prospective All Team franchisees in Minnesota, as it prevents the franchisor from imposing potentially unfair or excessive financial penalties. It ensures that any damage claims would need to be substantiated and determined through a fair legal process, rather than being pre-agreed to in a potentially disadvantageous manner for the franchisee. This provision aims to balance the power dynamic between the franchisor and franchisee, providing additional legal safeguards for franchisees operating within Minnesota.