In Minnesota, can the Bombs Away franchisor require the franchisee to consent to termination penalties?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD 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 36–117)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, the franchisor cannot require franchisees in Minnesota to consent to termination penalties. The Minnesota Addendum explicitly states that Minnesota Statutes, Section 80C.21 and Minnesota Rules 2860.4400(J) prohibit the franchisor from requiring the franchisee to consent to liquidated damages, termination penalties, or judgment notes. This protects franchisees from potentially unfair financial burdens upon termination of the franchise agreement.
This provision ensures that Bombs Away franchisees in Minnesota retain all rights and remedies available under Minnesota law, preventing the franchise agreement from diminishing these rights. This includes the franchisee's rights as provided for in Minnesota Statutes, Chapter 80C, and the franchisee's rights to any procedure, forum, or remedies provided for by the laws of the jurisdiction.
For a prospective Bombs Away franchisee in Minnesota, this addendum offers significant protection. It means that the franchise agreement cannot force them to accept penalties or damages if the agreement is terminated. This protection aligns with Minnesota's franchise laws, which aim to balance the relationship between franchisors and franchisees, ensuring fairness and preventing overreach by the franchisor.