If a Carbones Pizzeria franchisee is not a resident of Minnesota, does the Minnesota Franchise Act apply?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
Except to the extent governed by the United States Trademark Act of 1946 (Lanham Act; 15 U.S.C. § 1050 et seq.), or the United States Arbitration Act (9 U.S.C. § 1 et seq.), this Agreement shall be governed by the laws of the State of Minnesota. The parties agree, however, that if the Franchisee is not a resident of Minnesota, or if the Restaurant is not located in Minnesota, then they hereby waive the provisions of
the Minnesota Franchise Act and the regulations promulgated thereunder. If the Minnesota Franchise Act does not apply to the Franchise relationship created hereby, but there is a statute in the state in which the Restaurant is situated that specifically governs relationships between franchisees and franchisors and that law would otherwise apply, then that particular law shall apply in lieu of the foregoing.
Source: Item 23 — RECEIPTS (FDD pages 30–116)
What This Means (2025 FDD)
According to Carbones Pizzeria's 2025 Franchise Disclosure Document, the Minnesota Franchise Act may not apply if the franchisee is not a resident of Minnesota or if the restaurant is not located in Minnesota. In such cases, the franchisee and franchisor may waive the provisions of the Minnesota Franchise Act and its regulations. However, if there is a statute in the state where the restaurant is located that specifically governs franchise relationships, that law may apply instead.
This waiver has significant implications for prospective Carbones Pizzeria franchisees. The Minnesota Franchise Act provides certain protections to franchisees, such as regulations regarding termination, renewal, and transfer of the franchise. By waiving these protections, franchisees may be subject to different, potentially less favorable, legal standards.
For example, dispute resolution might be handled differently, and the grounds for termination could vary. Therefore, it is crucial for potential franchisees to understand the specific laws that would govern their franchise agreement if the Minnesota Franchise Act is waived, and to seek legal counsel to assess the potential impact on their rights and obligations. Franchisees should carefully consider the implications of this clause and how it might affect their business relationship with Carbones Pizzeria.