Can Alloy require litigation to be conducted outside of Minnesota for Minnesota franchisees?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Section 16.I is modified to reflect that Minn. Stat. Sec. 80C.21 and Minn. Rule 2860.4400J prohibit us from requiring litigation to be conducted outside of Minnesota. To the extent the Franchise Agreement requires litigation to be conducted outside of Minnesota, such provision is void.
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- Section 16.J is hereby deleted in its entirety.
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- No release language set forth in the Franchise Agreement shall relieve Franchisor or any other person, directly or indirectly, from liability imposed by the laws concerning franchising of the State of Minnesota, provided, that this part will not bar the voluntary settlement of disputes.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, Minnesota franchisees have specific protections under Minnesota law. Specifically, Alloy is prohibited from requiring that litigation be conducted outside of Minnesota. This protection is explicitly stated in the addendum to the franchise agreement for Minnesota franchisees, ensuring that any clause in the standard agreement that might require out-of-state litigation is void.
This provision is beneficial for Minnesota-based Alloy franchisees because it ensures that any legal disputes with Alloy can be resolved within the state's legal system. This can reduce the costs and logistical challenges associated with traveling to another state for court proceedings. It also means that Minnesota franchisees can rely on the familiarity of local courts and legal procedures.
This protection is in place because Minnesota Statutes, Chapter 80C, grants specific rights to franchisees within the state. The FDD emphasizes that nothing in the franchise agreement can reduce these rights or the franchisee's access to procedures, forums, or remedies available under Minnesota law. This addendum serves to reinforce the state's commitment to protecting franchisees and ensuring fair business practices within the state.
Prospective Alloy franchisees in Minnesota should carefully review the Minnesota addendum to the franchise agreement to fully understand their rights and protections under state law. This includes understanding the implications of the clause preventing Alloy from requiring litigation outside of Minnesota, as well as other rights related to termination, nonrenewal, and dispute resolution.