Under Minnesota law, can Crave Cookies unreasonably withhold consent to the transfer of a franchise?
Crave_Cookies Franchise · 2025 FDDAnswer from 2025 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 47–194)
What This Means (2025 FDD)
According to Crave Cookies' 2025 Franchise Disclosure Document, Minnesota law does provide certain protections regarding the transfer of a franchise. Specifically, for franchises governed by Minnesota law, Crave Cookies must comply with Minnesota Statutes, Section 80C.14, Subd. 3-5. These statutes stipulate that, except in certain specified cases, Crave Cookies cannot unreasonably withhold consent to the transfer of a franchise.
This means that if a Crave Cookies franchisee in Minnesota wants to sell or transfer their franchise to another party, Crave Cookies must have a reasonable basis for refusing to approve the transfer. What constitutes "unreasonable" is not defined in this excerpt, but it generally implies that the franchisor's decision must be based on objective criteria, such as the proposed transferee's financial stability, business experience, or willingness to comply with the franchise agreement.
This protection is beneficial for Minnesota Crave Cookies franchisees, as it prevents Crave Cookies from arbitrarily blocking a transfer for reasons that are not related to the transferee's qualifications or the integrity of the Crave Cookies brand. However, it's important to note the phrase "except in certain specified cases," which suggests there may be situations where Crave Cookies can withhold consent even if it might otherwise be considered unreasonable. Franchisees should consult the full text of Minnesota Statutes, Section 80C.14, Subd. 3-5, to understand these exceptions fully. Additionally, the FDD states that nothing in the disclosure document or agreements can reduce any of the franchisee's rights as provided for in Minnesota Statutes, Chapter 80C.
Prospective Crave Cookies franchisees in Minnesota should carefully review the franchise agreement and related documents with legal counsel to fully understand their rights and obligations regarding franchise transfers. They should also inquire about any specific criteria or procedures that Crave Cookies uses to evaluate proposed transferees to ensure they are aware of the requirements for obtaining consent to a transfer.