Can an Endless Summer Sweets franchisee in Minnesota be required to consent to termination penalties?
Endless_Summer_Sweets Franchise · 2024 FDDAnswer from 2024 FDD Document
• Minnesota Statutes, Section 80C.21 and Minnesota Rules 2860.4400(J) prohibit the franchisor from requiring litigation to be conducted outside Minnesota, requiring waiver of a jury trial, or requiring the franchisee to consent to liquidated damages, termination penalties or judgment notes. In addition, nothing in the Franchise Disclosure Document or agreement(s) can abrogate or reduce (1) any of the franchisee's rights as provided for in Minnesota Statutes, Chapter 80C or (2) franchisee's rights to any procedure, forum, or remedies provided for by the laws of the jurisdiction.
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 39–125)
What This Means (2024 FDD)
According to the 2024 Endless Summer Sweets Franchise Disclosure Document, Minnesota Statutes, Section 80C.21 and Minnesota Rules 2860.4400(J) explicitly prohibit Endless Summer Sweets from requiring a franchisee in Minnesota to consent to liquidated damages, termination penalties, or judgment notes. This protection is in place to safeguard the franchisee's rights under Minnesota law.
Furthermore, the Minnesota addendum clarifies that nothing within the Franchise Disclosure Document or any related agreements can diminish or override any of the franchisee's rights as defined in Minnesota Statutes, Chapter 80C, or their entitlement to procedures, forums, or remedies provided by Minnesota law. This ensures that Minnesota franchisees retain all legal rights and protections afforded to them under state law.
In addition to the prohibition on certain requirements, Endless Summer Sweets must also comply with Minnesota Statutes, Section 80C.14, Subd. 3-5 regarding termination and non-renewal. Except in specific cases, Endless Summer Sweets must provide a franchisee with 90 days' notice of termination (including 60 days to cure the issue) and 180 days' notice for non-renewal of the franchise agreement. The franchisor also cannot unreasonably withhold consent for the transfer of the franchise. These regulations provide additional security and rights to Endless Summer Sweets franchisees operating in Minnesota.