In Minnesota, can Cinnaholic require a franchisee to consent to termination penalties?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
Minnesota Statute 80C.21 and Minnesota Rule 2860.4400(J) prohibit the franchisor from requiring litigation to be conducted outside Minnesota, requiring waiver of a jury trial, or requiring the franchisee to consent to liquidated damages, termination penalties or judgment notes.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 27–35)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, Minnesota Statute 80C.21 and Minnesota Rule 2860.4400(J) explicitly prohibit Cinnaholic from requiring a franchisee to consent to termination penalties. This protection is in place to safeguard the franchisee's rights and ensure fair practices within the franchise agreement.
This means that any clause within Cinnaholic's franchise agreement that mandates a franchisee's consent to termination penalties is unenforceable in Minnesota. The franchisee cannot be forced to agree to such terms as a condition of the franchise. This provision aims to balance the power dynamic between the franchisor and franchisee, preventing potentially coercive agreements.
Prospective Cinnaholic franchisees in Minnesota should be aware of this protection and carefully review their franchise agreement to ensure compliance with Minnesota law. If the agreement contains any clauses that appear to violate this statute, franchisees should seek legal counsel to understand their rights and options. This statute ensures that franchisees are not unfairly penalized upon termination of the franchise agreement.