Can Cream require a franchisee in Minnesota to consent to liquidated damages?
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, if a Cream franchised business is operated in Minnesota, Cream is prohibited from requiring the franchisee to consent to liquidated damages. Specifically, Minn. Stat. Sec. 80C.21 and Minn. Rule 2860.4400J do not allow Cream to require a franchisee to consent to liquidated damages, termination penalties, or judgment notes.
This protection extends to the Area Development Agreement as well. The FDD states that these statutes and rules also prevent Cream from requiring an Area Developer to consent to liquidated damages, termination penalties, or judgment notes in Minnesota.
Furthermore, the FDD states that nothing in the Disclosure Document, Area Development Agreement, or Franchise Agreement can reduce any of an Area Developer's or Franchisee's rights as provided for in Minnesota Statutes, Chapter 80C, or their rights to any procedure, forum, or remedies provided for by the laws of the jurisdiction.