In Minnesota, what is Circle K prohibited from including in its franchise agreement regarding litigation location?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
- The following is added at the end of Article 18 (Dispute Resolution) of the Agreement:
"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.
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.
This section must comply with Minnesota Statutes, Section 80C.17, Subd. 5."
Source: Item 22 — CONTRACTS (FDD page 100)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, Minnesota Statutes, Section 80C.21 and Minnesota Rules 2860.4400(J) explicitly prohibit Circle K from requiring franchisees to conduct litigation outside of Minnesota. This protection ensures that Minnesota-based Circle K franchisees are not forced to bear the additional costs and burdens of pursuing legal action in a different state. This provision is designed to protect franchisees, who are often in a weaker negotiating position than the franchisor.
In addition to the litigation location, Circle K is also prohibited from including clauses that require franchisees to waive their right to a jury trial. Furthermore, the franchise agreement cannot force a franchisee to consent to liquidated damages, termination penalties, or judgment notes. These restrictions collectively aim to create a fairer balance of power between Circle K and its Minnesota franchisees by preventing the imposition of potentially onerous or unfair contractual terms.
The FDD also states that nothing in the Franchise Disclosure Document or the franchise agreement can reduce or abrogate any of the franchisee's rights as provided for in Minnesota Statutes, Chapter 80C, or the franchisee's rights to any procedure, forum, or remedies provided by the laws of the jurisdiction. This reinforces the protection of franchisees' legal rights and ensures that Minnesota law takes precedence over any conflicting terms in the franchise agreement. Moreover, franchisees cannot consent to Circle K obtaining injunctive relief, although Circle K retains the right to seek such relief. These stipulations are specific to Minnesota and reflect the state's regulatory approach to franchising.