Can Circle K require a franchisee in Minnesota to consent to liquidated damages?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor: TMC Franchise Corporation
ADDENDUM TO FRANCHISE DISCLOSURE DOCUMENT FOR THE STATE OF MINNESOTA
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 liquidated damages. Specifically, an addendum to the FDD for Minnesota franchisees 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. This protection is in place to ensure that franchisees are not subjected to unfair contractual terms that could be detrimental to their business.
This means that any clause within the standard Circle K franchise agreement that might suggest a franchisee's consent to liquidated damages is unenforceable in Minnesota. The FDD explicitly states that nothing in the disclosure document or agreements can reduce 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 for by the laws of the jurisdiction.
For a prospective Circle K franchisee in Minnesota, this is a significant protection. It ensures that they cannot be forced into agreeing to terms that might unfairly penalize them in the event of a dispute or termination. This provision is designed to balance the power dynamic between the franchisor and franchisee, providing a safeguard for the franchisee's interests under Minnesota law.