Does Minnesota law prohibit Chatime from requiring franchisees to agree to a general release?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Minn. Rules §2860.4400(D) prohibits a franchisor from requiring a franchisee to assent to a general release.
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- Any limitations of claims must comply with Minn. Stat. §80C.17, Subd. 5.
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- Exhibit F to the Franchise Disclosure Document (Acknowledgement Addendum to Franchise Agreement) is deleted. Franchisee and its principals are not required to complete and sign the Acknowledgement Addendum.
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- No statement, questionnaire, or acknowledgement signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to the 2025 Chatime Franchise Disclosure Document, Minnesota law prohibits Chatime from requiring franchisees to agree to a general release. Specifically, Minn. Rule §2860.4400(D) explicitly prohibits a franchisor from requiring a franchisee to assent to a general release. This protection is part of the Minnesota Franchise Act and related regulations, ensuring that franchisees are not forced into waiving their rights through a general release agreement.
This prohibition is further reinforced by the Minnesota Amendment to the Chatime Franchise Agreement. This amendment ensures that no statement, questionnaire, or acknowledgement signed by a franchisee can waive claims under applicable state franchise law, including claims of fraud. This provision overrides any conflicting terms in other documents related to the franchise agreement, strengthening the protection for franchisees in Minnesota.
For a prospective Chatime franchisee in Minnesota, this means they cannot be compelled to sign a general release that would waive their rights or claims against the franchisor. This provides a significant safeguard, ensuring franchisees retain their legal recourse and protections under Minnesota franchise law. This is a beneficial provision for franchisees, as it prevents them from unknowingly or unwillingly giving up their legal rights.