In Minnesota, can Cilantro Taco Grill require a franchisee to assent to a general release?
Cilantro_Taco_Grill Franchise · 2024 FDDAnswer from 2024 FDD Document
(c) In accordance with Minnesota Rules 2860.4400(D), we cannot require you to assent to a general release.
3 Minnesota Rules 2860.4400(D) prohibits a franchisor from requiring a franchisee's assent to a release other than as part of a voluntary settlement of disputes.
To the extent of any inconsistencies with the Minnesota Rules requirement contained in Sections 5.2.5 or 16.3.6 of the Franchise Agreement, such inconsistent provisions are hereby deleted.
Source: Item 23 — RECEIPT (FDD pages 52–208)
What This Means (2024 FDD)
According to Cilantro Taco Grill's 2024 Franchise Disclosure Document, the company is prohibited from requiring a franchisee to assent to a general release in Minnesota. Specifically, Minnesota Rules 2860.4400(D) prevents Cilantro Taco Grill from mandating that franchisees agree to a general release as a condition of the franchise agreement. This protection ensures that franchisees are not forced into broadly waiving their rights. However, this prohibition does not apply to voluntary settlements of disputes.
This means that while Cilantro Taco Grill cannot include a blanket requirement for a general release in its franchise agreement in Minnesota, franchisees might still be asked to sign a release as part of a negotiated settlement if a dispute arises. This distinction is important because it protects the franchisee's rights upfront while still allowing for resolution of conflicts through mutual agreement.
The FDD also notes that any inconsistencies with Minnesota Rules contained in Sections 5.2.5 or 16.3.6 of the Franchise Agreement are deleted, reinforcing the precedence of Minnesota law. This indicates that Cilantro Taco Grill acknowledges and complies with Minnesota's franchise regulations, providing a level of assurance to prospective franchisees in that state.