Is Better Blend allowed to require the franchisee to consent to termination penalties in Minnesota?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
MINNESOTA ADDENDUM TO DISCLOSURE DOCUMENT
In the State of Minnesota only, this Disclosure Document is amended as follows:
- Minnesota Statutes, Section 80C.21 and Minnesota Rules 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 agreement(s) 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 43–157)
What This Means (2024 FDD)
According to Better Blend's 2024 Franchise Disclosure Document, the Minnesota Addendum specifically addresses the issue of termination penalties. It states that Minnesota Statutes, Section 80C.21 and Minnesota Rules 2860.4400(J) prohibit Better Blend from requiring a franchisee in Minnesota to consent to termination penalties. This means that any clause in the standard franchise agreement that might imply consent to such penalties is unenforceable in Minnesota.
For a prospective Better Blend franchisee in Minnesota, this addendum provides significant protection. It ensures that they cannot be forced to agree to financial penalties solely as a result of the termination of the franchise agreement. This protection aligns with Minnesota law, which aims to safeguard franchisee rights and prevent franchisors from imposing unduly burdensome conditions.
This provision is particularly important because it overrides any conflicting terms in the standard Better Blend franchise agreement. Franchisees in Minnesota should be aware of this addendum and understand that their rights under Minnesota law take precedence over standard contractual clauses. This ensures a fairer balance of power between the franchisor and franchisee within the state.