Can Cool Binz require the franchisee to consent to liquidated damages in Minnesota?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
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, if a Cool Binz franchise is offered or sold in Minnesota, or if the franchisee is a resident of Minnesota, Cool Binz is prohibited from requiring the franchisee to consent to liquidated damages. This protection is explicitly stated in the addendum to the franchise agreement for use in Minnesota. This addendum takes precedence over any conflicting terms in the standard franchise agreement.
This means that Cool Binz franchisees in Minnesota cannot be forced to agree in advance to pay a predetermined amount of damages in the event of a contract breach or termination. This is a significant benefit for franchisees, as it prevents Cool Binz from imposing potentially unfair or excessive financial penalties. Instead, any damages would need to be determined through a fair legal process, if necessary.
This provision is in place to protect the rights of franchisees under the Minnesota Franchise Act. Prospective Cool Binz franchisees in Minnesota should carefully review the franchise agreement and the Minnesota addendum to ensure that their rights are fully protected under state law. They should also consult with an attorney to understand the implications of these provisions and how they apply to their specific circumstances.