In Minnesota, can Chocolate Fish Coffee require franchisees to consent to liquidated damages?
Chocolate_Fish_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
The franchisee cannot consent to the franchisor obtaining injunctive relief. The franchisor may seek injunctive relief. See Minn. Rules 2860.4400J. Also, a court will determine if a bond is required.
The Limitations of Claims section must comply with Minnesota Statutes, Section 80C.17, Subd. 5, and therefore the applicable provision of the Agreement is amended to state "No action may be commenced pursuant to Minnesota Statutes, Section 80C.17 more than three years after the cause of action accrues."
Source: Item 23 — RECEIPTS (FDD pages 41–119)
What This Means (2024 FDD)
According to Chocolate Fish Coffee's 2024 Franchise Disclosure Document, franchisees in Minnesota cannot consent to the franchisor obtaining injunctive relief, as stated in Minn. Rules 2860.4400J. The document also specifies that a court will determine if a bond is required in such cases.
Additionally, the Limitations of Claims section within the franchise agreement must adhere to Minnesota Statutes, Section 80C.17, Subd. 5. Therefore, the agreement is amended to state that "No action may be commenced pursuant to Minnesota Statutes, Section 80C.17 more than three years after the cause of action accrues."
These stipulations indicate that Minnesota law places specific restrictions on the terms that Chocolate Fish Coffee can enforce within its franchise agreements in the state, particularly regarding injunctive relief and limitations of claims. Prospective franchisees in Minnesota should carefully review these state-specific amendments and understand their rights under Minnesota law.