If references to liquidated damages are deleted from the Belocal franchise agreement in Minnesota, does this excuse the franchisee from liability for actual damages?

According to Belocal's 2025 Franchise Disclosure Document, the deletion of liquidated damages references from the franchise agreement in Minnesota does not excuse a franchisee from liability for actual or other damages. The FDD states that to the extent required by Minnesota law, the agreement will be amended to remove all references to liquidated damages that violate Minnesota law. However, this deletion does not release the franchisee from responsibility for actual damages.

Furthermore, the formula used to calculate liquidated damages within the original agreement or franchise disclosure document remains admissible as evidence to determine the extent of actual damages incurred. This means that even though Belocal cannot enforce a liquidated damages clause, the method it would have used to calculate those damages can still be presented in court as a way to measure the real financial harm suffered.

This provision ensures that while Belocal complies with Minnesota law by removing unenforceable liquidated damages clauses, franchisees are still accountable for any real losses they cause through breaches of contract or other actions. It also provides Belocal with a means to demonstrate and recover those actual damages, using the original liquidated damages formula as a guide for the court.