In Minnesota, can Crab N Spice require the franchisee to consent to termination penalties?
Crab_N_Spice Franchise · 2024 FDDAnswer from 2024 FDD Document
In the State of Minnesota only, this Disclosure Document is amended as follows:
- 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.
- With respect to franchises governed by Minnesota law, the franchisor will comply with Minnesota Statutes, Section 80C.14, Subd. 3-5, which require (except in certain specified cases) (1) that a franchisee be given 90 days' notice of termination (with 60 days to cure) and 180 days' notice for non-renewal of the franchise agreement and (2) that consent to the transfer of the franchise will not be unreasonably withheld.
Source: Item 23 — RECEIPTS (FDD pages 51–119)
What This Means (2024 FDD)
According to the 2024 Crab N Spice Franchise Disclosure Document, if you are franchising in Minnesota, Crab N Spice is prohibited from requiring you to consent to termination penalties. Minnesota Statutes, Section 80C.21 and Minnesota Rules 2860.4400(J) explicitly state that franchisors cannot require franchisees to consent to liquidated damages, termination penalties, or judgment notes.
This protection extends to other areas as well. The disclosure clarifies that nothing in the Franchise Disclosure Document or any related agreements can reduce or eliminate any of the franchisee's rights as provided in Minnesota Statutes, Chapter 80C. It also protects the franchisee's rights to any procedure, forum, or remedies available under Minnesota law.
Furthermore, Crab N Spice must comply with Minnesota Statutes, Section 80C.14, Subd. 3-5, regarding termination and non-renewal. This statute generally requires Crab N Spice to provide a franchisee with 90 days' notice of termination (with 60 days to cure the issue) and 180 days' notice for non-renewal, except in certain specified cases. Additionally, Crab N Spice cannot unreasonably withhold consent to the transfer of the franchise.