In Minnesota, can Best Brains require a franchisee to consent to termination penalties?
Best_Brains Franchise · 2025 FDDAnswer from 2025 FDD 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 Best Brains' 2025 Franchise Disclosure Document, Minnesota franchise laws protect franchisees from being required to consent to certain penalties. Specifically, Best Brains is prohibited from requiring franchisees in Minnesota to consent to liquidated damages or termination penalties. This protection is in place due to Minn. Stat. §80C.21 and Minn. Rule 2860.4400(J).
This means that if a Best Brains franchisee operates in Minnesota, they cannot be forced to agree to terms that would impose financial penalties upon termination of the franchise agreement. This provision aims to safeguard the franchisee's financial interests and prevent overly burdensome contractual obligations.
Furthermore, the FDD states that no terms within the Best Brains Franchise Disclosure Document or agreements can reduce any of the franchisee's rights as provided in Minnesota Statutes, Chapter 80C, or their rights to any procedure, forum, or remedies provided by Minnesota law. This ensures that Minnesota franchisees receive the full protection of their state's franchise laws, regardless of what the standard Best Brains franchise agreement might otherwise stipulate.