Under Minnesota law, are there provisions in the Auntie Annes Franchise Agreement that may be interpreted as unenforceable liquidated damages clauses?

According to Auntie Annes's 2024 Franchise Disclosure Document, the Franchise Agreement contains provisions that may be interpreted as liquidated damages clauses under Minnesota law. The FDD also states that certain liquidated damages clauses are unenforceable under Minnesota law.

This means that if Auntie Annes seeks to enforce a liquidated damages clause against a franchisee in Minnesota, a court could determine that the clause is unenforceable. Liquidated damages clauses aim to predetermine the amount of damages one party must pay to the other in the event of a breach of contract. However, Minnesota law places restrictions on these clauses, and courts may refuse to enforce them if they are deemed unreasonable or punitive.

For a prospective Auntie Annes franchisee in Minnesota, this addendum offers a degree of protection. It suggests that not all terms in the franchise agreement are set in stone and that Minnesota law can override certain provisions that might be unfavorable to the franchisee. It would be prudent for a potential franchisee to seek legal counsel to review the franchise agreement and understand which specific clauses might be affected by Minnesota law.