Is Circle K allowed to require a franchisee in Minnesota to consent to termination penalties?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
The following information applies to franchises and franchisees subject to Minnesota statutes and regulations:
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- Minnesota Statutes, Section 80C.21 and Minnesota Rules 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. In addition, nothing in the Franchise Disclosure Document or agreement(s) can abrogate or reduce (1) any of the franchisee's rights as provided for in Minnesota Statutes, Chapter 80C or (2) franchisee's rights to any procedure, forum, or remedies provided for by the laws of the jurisdiction.
Source: Item 22 — CONTRACTS (FDD page 100)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, Minnesota statutes protect franchisees from being required to consent to termination penalties. Specifically, the addendum for Minnesota states that Minnesota Statutes, Section 80C.21 and Minnesota Rules 2860.4400(J) prohibit Circle K from requiring a franchisee to consent to liquidated damages, termination penalties, or judgment notes. This ensures that Circle K franchisees in Minnesota retain all rights and remedies available under Minnesota law, preventing any reduction or abrogation of these rights through the franchise agreement.
This protection extends to other key areas as well. The FDD states that Minnesota law requires Circle K to provide specific notices of termination and non-renewal, as well as protecting the franchisee's rights to use Circle K's trademarks. These regulations aim to create a fairer balance of power between the franchisor and franchisee.
Prospective Circle K franchisees in Minnesota should carefully review the Minnesota Addendum to the Franchise Agreement. Understanding these protections is crucial before signing any franchise agreement, as these provisions directly impact the franchisee's rights and obligations under Minnesota law.