In Minnesota, can Buns On Fire require a franchisee to consent to liquidated damages?
Buns_On_Fire Franchise · 2025 FDDAnswer from 2025 FDD Document
Minn. Stat. § 80C.21 and Minn. Rule 2860.4400(J) prohibit us from requiring litigation to be conducted outside Minnesota, requiring waiver of a jury trial, or requiring you 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 any of your rights as provided for in Minnesota Statutes, Chapter 80C, or your rights to any procedure, forum, or remedies provided for by the laws of the jurisdiction.
Source: Item 23 — RECEIPTS (FDD pages 49–200)
What This Means (2025 FDD)
According to the 2025 Buns On Fire Franchise Disclosure Document, Minnesota law prohibits Buns On Fire from requiring franchisees to consent to liquidated damages. This protection is explicitly stated in the addendum for Minnesota, ensuring that franchisees are not forced into agreements that include such terms. This provision is in place to safeguard the rights of franchisees under Minnesota Statutes, Chapter 80C.
This means that any clause within the franchise agreement that could be interpreted as a liquidated damages clause may be deemed unenforceable in Minnesota. The FDD highlights that Minnesota Statute § 80C.21 and Minn. Rule 2860.4400(J) explicitly prohibit Buns On Fire from requiring franchisees to consent to liquidated damages.
For a prospective Buns On Fire franchisee in Minnesota, this is a significant protection. It prevents the franchisor from imposing potentially unfair financial penalties through liquidated damages clauses. Franchisees should ensure that their franchise agreement adheres to these Minnesota-specific regulations and seek legal counsel if they encounter any clauses that appear to violate these protections.