In Minnesota, can Best Brains require franchisees to consent to liquidated damages?
Best_Brains Franchise · 2025 FDDAnswer from 2025 FDD Document
MINNESOTA ADDENDUM TO THE FRANCHISE AGREEMENT
If any of the terms of the Franchise Agreement 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 23 — RECEIPTS (FDD pages 42–190)
What This Means (2025 FDD)
According to Best Brains' 2025 Franchise Disclosure Document, if you are a franchisee in Minnesota, Best Brains is prohibited from requiring you to consent to liquidated damages. This protection is explicitly stated in the Minnesota Addendum to the Franchise Agreement.
This means that Best Brains cannot force you to agree in advance to a specific amount of monetary damages in the event of a breach of contract. Minnesota law, specifically Minn. Stat. §80C.21 and Minn. Rule 2860.4400(J), ensures that franchisees retain their rights and remedies under state law, preventing franchisors from imposing unfair or restrictive terms.
This provision is beneficial for prospective Best Brains franchisees in Minnesota, as it prevents the franchisor from including clauses that predetermine damage amounts, which could potentially be unfavorable to the franchisee. It ensures that any disputes regarding damages would be subject to legal determination rather than a pre-agreed penalty. This protection aligns with the broader aim of Minnesota law to safeguard franchisee rights and provide a fair franchising environment.