In Minnesota, can Cool Binz require a Cool Binz franchisee to consent to liquidated damages, termination penalties, or judgment notes?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
Dispute Resolution Procedures/Governing Law. The following language is added to Sections 15.F and 15.H. of the Agreement:
PURSUANT TO MINN. STAT. 80C.21 AND MINN. RULE 2860.4400J,the Franchisor is prohibited from (i) requiring litigation to be conducted outside Minnesota; (ii) requiring waiver of a jury trial; and (iii) requiring the franchisee to consent to liquidated damages, termination penalties or judgment notes. Nothing in the Franchise Disclosure Document or agreement(s) can abrogate or reduce (i) any of the franchisee's rights as provided for in Minnesota Franchise Act or (ii) franchisee's rights to any procedure, forum, or remedies provided for by the laws of the jurisdiction.
Source: Item 23 — RECEIPTS (FDD pages 63–238)
What This Means (2025 FDD)
According to Cool Binz's 2025 Franchise Disclosure Document, Cool Binz is prohibited from requiring a franchisee in Minnesota to consent to liquidated damages, termination penalties, or judgment notes. This protection is explicitly stated in Item 23, which addresses receipts and compliance with Minnesota state law. This provision ensures that Cool Binz franchisees operating in Minnesota are not subject to these specific types of financial obligations or legal waivers that could be detrimental to their business.
This prohibition is in accordance with Minn. Stat. 80C.21 and Minn. Rule 2860.4400J, which aim to protect franchisees' rights within the state. Additionally, the FDD states that nothing in the disclosure document or agreements can reduce any of the franchisee's rights as provided for in the Minnesota Franchise Act or their rights to any procedure, forum, or remedies provided for by the laws of the jurisdiction. This reinforces the commitment to upholding franchisee protections under Minnesota law.
For a prospective Cool Binz franchisee in Minnesota, this means that the franchise agreement cannot legally compel them to agree to terms that impose liquidated damages, termination penalties, or judgment notes. This provides a degree of financial and legal security, ensuring that the franchisee's rights are safeguarded as per Minnesota state regulations. This protection is a significant benefit for franchisees, as it prevents Cool Binz from imposing potentially unfair or overly burdensome financial obligations through these specific mechanisms.