Under Minnesota law, can Auntie Annes unreasonably withhold consent to the transfer of a franchise?
Auntie_Annes Franchise · 2024 FDDAnswer from 2024 FDD Document
Section 16 (Transfer) of the Franchise Agreement will be supplemented by adding of the following as Section 16.11 of the Franchise Agreement, which will be considered an integral part of the Franchise Agreement:
- Minnesota law provides you with certain transfer rights.
In sum, Minn.
Stat. § 80C.14 (subd. 5) currently requires, except in certain specified cases, that consent to the transfer of the Franchise not be unreasonably withheld.
Source: Item 22 — CONTRACTS (FDD page 106)
What This Means (2024 FDD)
According to Auntie Annes's 2024 Franchise Disclosure Document, Minnesota law addresses the transfer of franchises. Specifically, Minnesota Statute § 80C.14 (subd. 5) generally requires that Auntie Annes's consent to a franchise transfer cannot be unreasonably withheld, except in certain specified cases. This provision is integrated into the Franchise Agreement as Section 16.11.
This means that if a franchisee in Minnesota wants to sell or transfer their Auntie Annes franchise to someone else, Auntie Annes cannot arbitrarily deny the transfer. There must be a legitimate, justifiable reason for withholding consent. This protection is designed to ensure franchisees have a reasonable exit strategy and are not unfairly locked into their franchise agreements.
However, the FDD also notes that there are 'certain specified cases' where this requirement may not apply. It is important for a prospective franchisee to understand what these exceptions are. A potential franchisee should seek clarification from Auntie Annes regarding the specific conditions under which consent to transfer could be reasonably withheld to fully understand their rights and obligations under Minnesota law.