What is the exception to Canine Dimensions' right to liquidated damages upon early termination by the franchisee?
Canine_Dimensions Franchise · 2025 FDDAnswer from 2025 FDD Document
Minn. Rule Part 2860.4400J. prohibits a franchisee from waiving his rights to a jury trial or waiving his rights to any procedure, forum, or remedies provided for by the laws of the jurisdiction, or consenting to liquidated damages, termination penalties or judgment notes.
Any provision in the Agreement which would require you to waive your rights to any procedure, forum or remedies provided for by the laws of the State of Minnesota is deleted from any Agreement relating to franchises offered and sold in the State of Minnesota; provided, however, that this paragraph will not affect the obligation in the Agreement relating to arbitration.
Source: Item 22 — CONTRACTS (FDD page 36)
What This Means (2025 FDD)
According to Canine Dimensions' 2025 Franchise Disclosure Document, the franchisor's right to enforce liquidated damages upon early termination by the franchisee is not applicable to franchises offered and sold in the State of Minnesota.
Specifically, the FDD states that Minnesota Rule Part 2860.4400J prohibits a franchisee from consenting to liquidated damages. Therefore, any provision in the Canine Dimensions franchise agreement that would require a franchisee in Minnesota to waive their rights related to liquidated damages is deleted from the agreement.
This means that if a Canine Dimensions franchisee operates in Minnesota, they cannot be held liable for liquidated damages if the franchise agreement is terminated early. This protection is afforded by Minnesota state law, which takes precedence over conflicting terms in the standard franchise agreement. Prospective franchisees should consult with a legal professional to fully understand their rights and obligations under the franchise agreement, especially concerning termination and associated penalties.