In Minnesota, can Better Blend require the franchisee to consent to liquidated damages?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
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.
- With respect to franchises governed by Minnesota law, the franchisor will comply with Minnesota Statutes, Section 80C.14, Subd. 3-5, which require (except in certain specified cases) (1) that a franchisee be given 90 days' notice of termination (with 60 days to cure) and 180 days' notice for non-renewal of the franchise agreement and (2) that consent to the transfer of the franchise will not be unreasonably withheld.
Source: Item 23 — RECEIPTS (FDD pages 43–157)
What This Means (2024 FDD)
According to Better Blend's 2024 Franchise Disclosure Document, if you are opening a franchise in Minnesota, Better Blend is prohibited from requiring you to consent to liquidated damages. Minnesota Statutes, Section 80C.21 and Minnesota Rules 2860.4400(J) explicitly state that franchisors cannot mandate franchisees to agree to liquidated damages. This protection is part of Minnesota's franchise laws designed to safeguard franchisee rights.
This means that any clause in the franchise agreement that stipulates pre-determined amounts to be paid by the franchisee to Better Blend in the event of a breach or termination may not be enforceable in Minnesota. The Minnesota Addendum to the Disclosure Document clarifies that the standard terms of the franchise agreement are amended to comply with Minnesota law.
Prospective franchisees in Minnesota should be aware of this provision and ensure that their franchise agreement does not contain clauses that violate Minnesota law. It's advisable to consult with a legal professional to review the franchise agreement and ensure full compliance with state regulations, as the franchisor will comply with Minnesota Statutes, Section 80C.14, Subd. 3-5.