In Minnesota, can Best Brains require a franchisee to consent to liquidated damages?
Best_Brains Franchise · 2025 FDDAnswer from 2025 FDD Document
MINNESOTA ADDENDUM TO THE DISCLOSURE DOCUMENT
As to franchises governed by the Minnesota franchise laws, if any of the terms of the Disclosure Document are inconsistent with the terms below, the terms below control.
- Minn. Stat. §80C.21 and Minn. Rule 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 agreements 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 21 — FINANCIAL STATEMENTS (FDD page 42)
What This Means (2025 FDD)
According to the 2025 Best Brains Franchise Disclosure Document, Minnesota franchise laws prohibit Best Brains from requiring a franchisee to consent to liquidated damages. This protection is explicitly stated in the Minnesota Addendum within the FDD. This addendum clarifies that if any terms in the standard disclosure document are inconsistent with Minnesota law, the state law takes precedence.
For a prospective Best Brains franchisee in Minnesota, this means that the franchise agreement cannot force them to agree to liquidated damages, which are pre-set amounts of money payable in the event of a breach of contract. This provision protects the franchisee from potentially unfair or excessive financial penalties.
Furthermore, the Minnesota Addendum also reinforces that nothing in the Best Brains Franchise Disclosure Document or agreements can reduce any of the franchisee's rights as provided for in Minnesota Statutes, Chapter 80C, or the franchisee's rights to any procedure, forum, or remedies provided for by the laws of the jurisdiction. This ensures that franchisees retain all rights and legal protections afforded to them under Minnesota law.