Can Closet Storage Concepts require a franchisee to consent to judgment notes in Minnesota?
Closet_Storage_Concepts Franchise · 2025 FDDAnswer from 2025 FDD Document
Minn.
Stat.
Sec. 80C.21 and 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.
In addition, nothing in the Franchise Disclosure Document or agreements can abrogate or reduce any of the franchisee's rights as provided for in Minnesota Statutes, Chapter 80C, or franchisee's rights to any procedure, forum, or remedies provided for by the laws of the jurisdiction."
Source: Item 23 — RECEIPTS (FDD pages 59–238)
What This Means (2025 FDD)
According to Closet Storage Concepts' 2025 Franchise Disclosure Document, the franchisor is prohibited from requiring a franchisee to consent to judgment notes in the state of Minnesota. Specifically, the FDD states that Minnesota Statutes Sec. 80C.21 and Rule 2860.4400(J) explicitly prevent Closet Storage Concepts from including such a requirement in their franchise agreement. This protection is part of a broader set of regulations designed to safeguard the rights of franchisees within Minnesota.
This means that if you are considering opening a Closet Storage Concepts franchise in Minnesota, you cannot be compelled to agree to judgment notes as part of your franchise agreement. Judgment notes typically allow a franchisor to obtain a judgment against a franchisee without a full trial, which can be a significant risk for the franchisee. The Minnesota addendum ensures that franchisees retain their rights to due process and legal recourse within the state.
Furthermore, the FDD clarifies that nothing within the Franchise Disclosure Document or the franchise agreements can override or diminish any of the franchisee's rights as outlined in Minnesota Statutes, Chapter 80C. This provision reinforces the state's commitment to protecting franchisees' interests and ensuring fair franchising practices. Prospective franchisees should carefully review the Minnesota addendum to fully understand their rights and protections under Minnesota law.