In Minnesota, is Embassy Suites prohibited from requiring franchisees to consent to liquidated damages?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Item 17 (i) is amended to state that Minnesota Rule 2860.4400J prohibits requiring you to consent to liquidated damages.
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- Items 17 (i), (v) and (w) are amended to state that Minnesota Statutes, Sections 80C.21 and Minnesota Rule 2860.4400J prohibits us from requiring litigation to be conducted outside Minnesota, requiring waiver of a jury trial, or requiring you to consent to liquidated damages, termination penalties or judgment notes. Nothing in the Franchise Disclosure Document or agreement can abrogate or reduce any of your rights as provided for in Minnesota Statutes, Chapter 80C, or your rights to any procedure, forum or remedies provided for by the laws of Minnesota.
Source: Item 23 — RECEIPTS (FDD pages 97–305)
What This Means (2025 FDD)
According to Embassy Suites's 2025 Franchise Disclosure Document, Minnesota law includes specific protections for franchisees. In Minnesota, Embassy Suites is prohibited from requiring franchisees to consent to liquidated damages. This protection is explicitly stated in the addendum to the disclosure document that addresses Minnesota franchise law.
This means that Embassy Suites cannot include a clause in its franchise agreement that forces a franchisee to agree to pay a predetermined amount of money in the event of a breach of contract. This is a significant benefit for franchisees as it prevents the franchisor from imposing potentially unfair or excessive financial penalties.
This provision ensures that any disputes regarding damages are assessed fairly and prevents Embassy Suites from leveraging its position to demand unreasonable compensation. Prospective franchisees should carefully review the Minnesota addendum to the Franchise Agreement to fully understand their rights and protections under state law.