In Minnesota, can Crown Gold Exchange require the franchisee to consent to liquidated damages?
Crown_Gold_Exchange Franchise · 2024 FDDAnswer from 2024 FDD Document
• 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.
Source: Item 23 — RECEIPTS (FDD pages 39–114)
What This Means (2024 FDD)
According to Crown Gold Exchange's 2024 Franchise Disclosure Document, Minnesota Statutes, Section 80C.21 and Minnesota Rules 2860.4400(J) explicitly prohibit Crown Gold Exchange from requiring a franchisee in Minnesota to consent to liquidated damages. This protection is in place to ensure that franchisees are not subjected to potentially unfair financial penalties as a condition of their franchise agreement. This provision supersedes any other term of any document executed with the franchise.
This means that any clause within the franchise agreement that mandates a franchisee's consent to liquidated damages is unenforceable in the state of Minnesota. The Minnesota Addendum to the Disclosure Document clarifies that nothing in the Franchise Disclosure Document or associated agreements can diminish a franchisee's rights as provided by Minnesota Statutes, Chapter 80C, or their rights to any procedure, forum, or remedies available under Minnesota law.
Prospective Crown Gold Exchange franchisees in Minnesota should be aware of this protection and ensure that their franchise agreement complies with Minnesota law. If the franchise agreement contains any clauses that appear to contradict this protection, franchisees should seek legal counsel to ensure their rights are fully protected under Minnesota law.