Is Beehive Homes allowed to require a franchisee to consent to termination penalties in Minnesota?
Beehive_Homes Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Minnesota Statutes, 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 Minnesota Statutes, Chapter 80C or (2) franchisee's rights to any procedure, forum, or remedies provided for by the laws of the jurisdiction.
Source: Item 23 — RECEIPTS (FDD pages 34–123)
What This Means (2025 FDD)
According to Beehive Homes's 2025 Franchise Disclosure Document, Minnesota law has specific regulations that protect franchisees. Beehive Homes is prohibited from requiring franchisees in Minnesota to consent to termination penalties. This protection is explicitly stated in the FDD, referencing Minnesota Statutes, Section 80C.21 and Minnesota Rules 2860.4400(J).
This means that Beehive Homes cannot enforce any agreement where a Minnesota franchisee agrees in advance to pay penalties if the franchise agreement is terminated. This provision aims to prevent franchisors from imposing unfair financial burdens on franchisees upon termination.
Furthermore, the FDD states that nothing in the disclosure document or franchise agreement can reduce any of the franchisee's rights as provided by Minnesota Statutes, Chapter 80C, or their rights to any procedure, forum, or remedies provided by the laws of the jurisdiction. This reinforces the protection afforded to Minnesota franchisees and ensures that their legal rights are fully preserved.