Under what conditions can Degree Wellness withhold consent to the transfer of a franchise in Minnesota?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
- (ii) With respect to franchises governed by Minnesota law, we will comply with Minn.
Stat. § 80C.14, subds. 3, 4, and 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 a franchise will not be unreasonably withheld whenever the franchisee to be substituted meets the present qualifications and standards required of the franchisees by us.
- C.
Minnesota considers it unfair to not protect Franchise Owner's right to use the trademarks.
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, Minnesota law dictates specific conditions under which Degree Wellness can withhold consent for a franchise transfer. Degree Wellness must comply with Minn. Stat. § 80C.14, subds. 3, 4, and 5, which generally states that consent to transfer a franchise cannot be unreasonably withheld if the proposed new franchisee meets the current qualifications and standards required by Degree Wellness. This means that if the potential buyer meets Degree Wellness's criteria for franchisees at the time of the transfer, Degree Wellness cannot arbitrarily deny the transfer.
This provision protects the franchisee's ability to sell their business, ensuring that Degree Wellness cannot prevent a transfer based on unreasonable or discriminatory factors. However, Degree Wellness retains the right to ensure that any new franchisee meets their standards for business experience, financial resources, and overall suitability. The FDD also states that Minnesota considers it unfair to not protect Franchise Owner's right to use the trademarks.
In practical terms, a Degree Wellness franchisee in Minnesota can expect a fair review of any potential buyer, but must also ensure that the buyer is well-qualified and meets Degree Wellness's standards. It is important for prospective franchisees to understand these transfer conditions, as they impact the value and liquidity of their investment. Franchisees should also be aware of their rights under Minnesota law, which are designed to prevent franchisors from unduly restricting the transfer of franchises.