Can Ben Jerrys require a developer to consent to liquidated damages, termination penalties, or judgment notes in Minnesota?
Ben_Jerrys Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Subsection 17.4 of the Agreement, under the heading "Applicable Law," shall be supplemented by the following new subsection 17.4.1, which shall be considered an integral part of the Agreement:
- 17.4.1 Minn. Stat. §80C.21 and Minn. Rule 2860.4400J prohibit us from requiring litigation to be conducted outside Minnesota, or from requiring Developer to consent to liquidated damages, termination penalties or judgement notes. In addition, nothing in the Disclosure Document or agreement can abrogate or reduce (1) any of your rights as provided for in Minnesota Statutes, Chapter 80C, or (2) your rights to any procedure, forum, or remedies provided for by the laws of the jurisdiction.
Source: Item 22 — CONTRACTS (FDD pages 133–134)
What This Means (2025 FDD)
According to Ben Jerrys's 2025 Franchise Disclosure Document, Minnesota law protects franchisees and developers from certain contractual obligations. Specifically, Ben Jerrys is prohibited from requiring a developer in Minnesota to consent to liquidated damages, termination penalties, or judgment notes. This protection is explicitly stated in the Minnesota Amendment to the Development Agreement, ensuring that the franchise agreement adheres to Minnesota Statutes, Chapter 80C, and the rules promulgated by the Minnesota Commissioner of Commerce.
This provision means that Ben Jerrys cannot enforce clauses in its standard agreement that would compel a Minnesota developer to agree to predetermined financial penalties upon termination or breach of contract, or to consent to judgment notes, which are essentially confessions of judgment. The FDD emphasizes that nothing in the franchise agreement can reduce any of the developer's rights as provided by Minnesota law, including their rights to procedures, forums, or remedies available under state laws.
For a prospective Ben Jerrys developer in Minnesota, this is a significant safeguard. It prevents Ben Jerrys from imposing potentially unfair or overly burdensome financial obligations through standardized contract terms. The developer retains the right to contest damages and penalties in a fair legal process, and cannot be forced to pre-agree to unfavorable financial outcomes. This protection aligns with the broader intent of Minnesota's franchise laws to balance the power dynamic between franchisors and franchisees, ensuring a more equitable business relationship.
Furthermore, the Ben Jerrys FDD includes a Minnesota Amendment to the Development Agreement, which explicitly states that the agreement is subject to Minnesota's franchise laws and regulations. This amendment reinforces the protections afforded to Minnesota developers and ensures that all provisions of the agreement are effective only to the extent that they comply with Minnesota law. This means that any clause conflicting with Minnesota law is rendered ineffective, providing additional security for the developer.