Does the prohibition against requiring a general release from liability prevent Belocal from engaging in voluntary settlement of disputes with franchisees?

According to Belocal's 2025 Franchise Disclosure Document, Minnesota Rule 2860.4400(D) does not prevent Belocal from engaging in voluntary settlement of disputes with franchisees. The rule specifically prohibits Belocal from requiring a franchisee to agree to a general release from liability imposed by Minnesota Statutes, Sections 80C.01 to 80C.22. However, the rule explicitly states that this prohibition does not bar the voluntary settlement of disputes.

This means that while Belocal cannot force a franchisee to sign a general release of liability as a condition of the franchise agreement, Belocal and a franchisee can still voluntarily agree to settle disputes. This is a common practice in franchising, as it allows parties to resolve conflicts without resorting to litigation. Voluntary settlements typically involve both parties agreeing to certain terms, which may include a release of claims.

For a prospective Belocal franchisee in Minnesota, this is an important distinction. Belocal cannot mandate a blanket release of liability, protecting the franchisee's rights under Minnesota franchise law. However, if a dispute arises, the franchisee can still negotiate a settlement with Belocal, which may include a release of specific claims in exchange for certain considerations. This provides flexibility for resolving conflicts while safeguarding the franchisee's statutory rights.

It is important for franchisees to understand their rights and obligations under both the franchise agreement and applicable state laws. Consulting with an attorney is advisable to ensure that any settlement agreement is fair and protects the franchisee's interests.