Does Minnesota law allow Bambu to require litigation to be conducted outside of Minnesota?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
Minnesota Statutes, Section 80C.21 and Minnesota Rule 2860.4400(J) prohibit Bambu from requiring litigation to be conducted outside Minnesota, requiring waiver of a jury trial, or requiring Franchisee to consent to liquidated damages, termination penalties, or judgment notes. In addition, nothing in the Franchise Disclosure Document or this Agreement can abrogate or reduce (1) any of Franchisee's rights as provided for in Minnesota Statutes, Chapter 80C, or (2) Franchisee's rights to any procedure, forum, or remedies provided for by the laws of the jurisdiction. The above language has been included in this Agreement as a condition to registration. Bambu and Franchisee do not agree with the above language and believes that each of the provisions of the Agreement are fully enforceable. Bambu and Franchisee intend to fully enforce
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, Minnesota law includes specific protections for franchisees. Minnesota Statutes, Section 80C.21 and Minnesota Rule 2860.4400(J) explicitly prohibit Bambu from requiring franchisees to conduct litigation outside of Minnesota. This means that if a Bambu franchisee in Minnesota has a legal dispute with the company that goes to court, the franchisee cannot be forced to litigate the case in another state. This provision is included in the Franchise Disclosure Document as a condition of registration in Minnesota.
However, the FDD also states that Bambu does not agree with this restriction and believes that all provisions of the Franchise Agreement, including those related to venue, choice-of-law, and arbitration, are fully enforceable. Bambu intends to rely on federal pre-emption under the Federal Arbitration Act to enforce these provisions. This creates a potential conflict, as Bambu's stated intention is to enforce venue provisions that might require litigation outside of Minnesota, despite the state law prohibiting such requirements.
This situation presents a risk for prospective franchisees in Minnesota. While state law aims to protect franchisees by keeping litigation within Minnesota, Bambu's intention to enforce potentially conflicting provisions and rely on federal pre-emption introduces uncertainty. A franchisee could face legal challenges regarding where a dispute is litigated, potentially incurring additional costs and burdens if forced to argue for their rights under Minnesota law. Prospective franchisees should seek legal counsel to fully understand their rights and the potential implications of these conflicting statements within the Franchise Agreement.