Can Degree Wellness require a franchisee to consent to termination penalties under Minnesota law?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
Minn.
Stat. § 80C.21 and Minn.
Rule 2860.4400J prohibit Franchisor from requiring litigation from claims arising under Minnesota franchise laws (Minn.
Stat. §§80C.01
- through 80C.22) to be conducted outside Minnesota, requiring a waiver of jury trial, and prohibits Franchisor from requiring the Franchise Owner to consent to liquidated damages, termination penalties or judgment notes.
In addition, nothing in the Agreement or Franchise Disclosure Document can abrogate or reduce any of Franchise Owner's rights as provided for in Minnesota Statutes, Chapter 80C, or Franchise Owner's rights to any procedure, forum, or remedies provided for by the laws of the jurisdiction.
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, Minnesota law offers specific protections to franchisees. The FDD includes a Minnesota amendment to the franchise agreement that addresses these protections.
Specifically, Minnesota Statutes § 80C.21 and Minnesota Rule 2860.4400J explicitly prohibit Degree Wellness from requiring a franchisee to consent to liquidated damages, termination penalties, or judgment notes in the franchise agreement. This means that Degree Wellness cannot include clauses in its franchise agreement that would force a Minnesota franchisee to agree to financial penalties or other adverse consequences if the franchise is terminated.
This protection ensures that Minnesota franchisees are not subjected to unfair or coercive terms regarding termination. Additionally, the FDD states that nothing in the agreement or franchise disclosure document can reduce any of a franchisee's rights as provided for in Minnesota Statutes, Chapter 80C, or their rights to any procedure, forum, or remedies provided by Minnesota law.