In Minnesota, can Desi District unreasonably withhold consent to the transfer of a franchise?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
With respect to franchises governed by Minnesota law, the franchisor will comply with Minnesota Statutes, Section 80C.14, Subd. 3-5, 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 the franchise will not be unreasonably withheld.
Source: Item 23 — RECEIPTS (FDD pages 52–140)
What This Means (2024 FDD)
According to Desi District's 2024 Franchise Disclosure Document, specifically the Minnesota Addendum, Desi District must comply with Minnesota Statutes, Section 80C.14, Subd. 3-5 regarding franchise transfers. This statute requires that, except in certain specified cases, consent to the transfer of a Desi District franchise will not be unreasonably withheld.
This provision protects franchisees in Minnesota by preventing Desi District from arbitrarily denying a transfer request. This ensures that a franchisee can sell their business to a qualified buyer without facing unreasonable obstacles from the franchisor. However, the FDD does not define what constitutes "unreasonably withheld" consent, so there may be situations where Desi District could legitimately deny a transfer.
As a prospective franchisee, it would be prudent to seek legal counsel to fully understand the implications of Minnesota Statutes, Section 80C.14, Subd. 3-5 and what specific conditions or circumstances might allow Desi District to withhold consent to a transfer. Understanding these conditions can help a franchisee better plan for the future sale of their Desi District franchise.