In Minnesota, can Cream require the Area Developer or Franchisee to consent to liquidated damages, termination penalties, or judgment notes?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
Minn. Stat. Sec. 80C.21 and Minn. Rule 2860.4400J prohibits us from requiring litigation to be conducted outside Minnesota, requiring waiver of a jury trial or requiring the Area Developer or Franchisee to consent to liquidated damages, termination penalties or judgment notes. In addition, nothing in the Disclosure Document, Area Development Agreement or Franchise Agreement can abrogate or reduce any of Area Developer's or Franchisee's rights as provided for in Minnesota Statutes, Chapter 80C, or Area Developer's or Franchisee's rights to any procedure, forum or remedies provided for by the laws of the jurisdiction.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, Minnesota law protects Area Developers and Franchisees from being required to consent to certain terms. Specifically, Minn. Stat. Sec. 80C.21 and Minn. Rule 2860.4400J prohibit Cream from requiring an Area Developer or Franchisee to consent to liquidated damages, termination penalties, or judgment notes in Minnesota.
This means that Cream cannot include clauses in its agreements that force Area Developers or Franchisees to agree to these specific conditions. This protection ensures that Area Developers and Franchisees retain their rights and are not compelled to accept potentially unfair or detrimental terms.
Furthermore, the FDD states that nothing in the disclosure document, Area Development Agreement, or Franchise Agreement can override or diminish any of the Area Developer's or Franchisee's rights as provided by Minnesota Statutes, Chapter 80C, or their rights to any procedure, forum, or remedies provided by Minnesota law. This reinforces the protection afforded to Area Developers and Franchisees under Minnesota law, ensuring they maintain all legal rights and recourse options within the state's jurisdiction.