Can Cool Binz require the franchisee to consent to termination penalties in Minnesota?
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, if a Cool Binz franchise is governed by Minnesota law, Cool Binz is prohibited from requiring the franchisee to consent to termination penalties. Specifically, Minn. Stat. 80C.21 and Minn. Rule 2860.4400J prohibit Cool Binz from requiring a franchisee to consent to liquidated damages, termination penalties, or judgment notes. This protection is part of Minnesota's franchise law, which aims to safeguard franchisee rights.
This means that Cool Binz cannot enforce any clause in the franchise agreement that would force a franchisee to agree to pay penalties if the agreement is terminated. This provision ensures that Minnesota franchisees retain their rights and remedies under state law, preventing Cool Binz from imposing unreasonable standards of conduct or extracting unfair financial concessions upon termination.
Furthermore, 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 the franchisee's rights to any procedure, forum, or remedies provided for by the laws of the jurisdiction. This reinforces the protection afforded to Minnesota franchisees, ensuring that their legal rights and options remain intact throughout the franchise relationship.