Does Minn. Rule 2860.4400J bar an exclusive arbitration clause in the Dryject franchise agreement?

According to Dryject's 2025 Franchise Disclosure Document, Minn. Rule 2860.4400J does not bar an exclusive arbitration clause in the franchise agreement. The FDD specifies that while the rule prevents Dryject from requiring franchisees to waive their rights to a jury trial or any procedure, forum, or remedies provided by law, it explicitly states that this does not prohibit an exclusive arbitration clause. This means that Dryject can include a provision in its franchise agreement that mandates disputes be resolved through arbitration rather than litigation.

This is significant for prospective Dryject franchisees in Minnesota because it means they may be required to resolve disputes with Dryject through arbitration, which is generally faster and less expensive than traditional litigation. However, it also means they waive their right to a jury trial. The FDD also clarifies that Dryject cannot force franchisees to litigate outside of Minnesota or consent to liquidated damages, termination penalties, or judgment notes, further protecting the franchisee's rights within the arbitration process.

Furthermore, the FDD indicates that Dryject retains the right to seek injunctive relief, even though franchisees cannot waive their rights or consent to Dryject obtaining such relief. This is addressed by amending the franchise agreement to replace any language suggesting the franchisee consents to Dryject's right to injunctive relief with language stating that Dryject may seek such relief. This ensures compliance with Minnesota law while preserving Dryject's ability to protect its interests through injunctive action when necessary.