In Minnesota, can Cinnaholic require a franchisee to consent to liquidated damages?

According to Cinnaholic's 2025 Franchise Disclosure Document, Minnesota Statute 80C.21 and Minnesota Rule 2860.4400(J) explicitly prohibit Cinnaholic from requiring franchisees to consent to liquidated damages. This protection is in place to ensure fairness in the contractual relationship between the franchisor and the franchisee within the state of Minnesota.

This means that any clause within Cinnaholic's franchise agreement that mandates a franchisee's consent to liquidated damages would be unenforceable in Minnesota. Liquidated damages are predetermined amounts specified in a contract that one party must pay to the other in the event of a breach. Minnesota law intervenes to prevent franchisors from imposing such terms on franchisees, ensuring that franchisees are not forced into agreeing to potentially unfair financial penalties from the outset.

Prospective Cinnaholic franchisees in Minnesota should be aware of this protection. If the franchise agreement presented by Cinnaholic contains a clause requiring consent to liquidated damages, franchisees should understand that this clause is not enforceable under Minnesota law. Franchisees should seek legal counsel to ensure full understanding of their rights and protections under Minnesota franchise law.