What litigation-related requirements are prohibited for Belocal franchisees in Minnesota according to Minnesota Rule 2860.4400(J)?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Minnesota Rule 2860.4400(J) prohibits 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. This does not bar an exclusive arbitration clause. In addition, nothing the disclosure document or agreement can abrogate or reduce any of franchisee's right as provided for in Minnesota Statutes, Chapter 80C, or franchisee's rights to any procedure, forum, or remedies provided for by the laws of the jurisdiction.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, Minnesota Rule 2860.4400(J) places specific restrictions on what Belocal can require of its franchisees regarding litigation. Specifically, Belocal is prohibited from mandating that any litigation involving a Minnesota franchisee be conducted outside of Minnesota.
Additionally, Belocal cannot require a franchisee to waive their right to a jury trial. This ensures that franchisees retain their constitutional right to have disputes decided by a jury of their peers.
Furthermore, Belocal is barred from requiring franchisees to consent to liquidated damages, termination penalties, or judgment notes. However, the FDD clarifies that an exclusive arbitration clause is not prohibited. These regulations protect Minnesota-based Belocal franchisees by ensuring a fair legal process and preventing potentially unfair financial burdens related to litigation or termination.