Can All Team require a franchisee in Minnesota to consent to termination penalties?
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.
In addition, nothing in the Franchise Disclosure Document or agreement(s) can abrogate or reduce (1) any of the franchisee's rights as provided for in MINN.
STAT.
CHAPTER 80C or (2) franchisee's rights to any procedure, forum, or remedies provided for by the laws of the jurisdiction.
Source: Item 23 — RECEIPT (FDD pages 34–161)
What This Means (2025 FDD)
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 termination penalties. The Minnesota State Law Addendum explicitly states that certain provisions of the Minnesota Franchise Act apply to franchises within the state, superseding any conflicting terms in the standard Franchise Agreement or FDD.
Specifically, the FDD references MINN. STAT. SECTION 80C.21 and MINNESOTA RULES 2860.4400(J), which prevent All Team from requiring a franchisee to consent to liquidated damages, termination penalties, or judgment notes. This protection ensures that Minnesota franchisees are not forced into unfair agreements regarding financial repercussions upon termination of the franchise agreement.
This addendum also states that nothing in the Franchise Disclosure Document or agreements can reduce any of the franchisee's rights as provided for in MINN. STAT. CHAPTER 80C or franchisee's rights to any procedure, forum, or remedies provided for by the laws of the jurisdiction. This reinforces the protection of franchisee rights under Minnesota law, ensuring that franchisees retain all legal recourse and protections afforded to them within the state.