In Minnesota, can Endless Summer Sweets require the franchisee to consent to liquidated damages?

According to Endless Summer Sweets' 2024 Franchise Disclosure Document, the franchisor is prohibited from requiring a franchisee in Minnesota to consent to liquidated damages. The Minnesota Addendum to the Disclosure Document explicitly states that Minnesota Statutes, Section 80C.21 and Minnesota Rules 2860.4400(J) prevent Endless Summer Sweets from including such a requirement in its franchise agreement. This protection is in place to safeguard the franchisee's rights under Minnesota law.

This means that if a prospective franchisee is opening an Endless Summer Sweets location in Minnesota, they cannot be forced to agree to a clause that would predetermine the amount of damages owed in the event of a breach of contract. Liquidated damages clauses can sometimes be unfavorable to the franchisee, as they may not accurately reflect the actual harm suffered by the franchisor. Minnesota law aims to prevent franchisors from imposing potentially unfair financial burdens on franchisees through such clauses.

In addition to the prohibition on requiring consent to liquidated damages, the Minnesota Addendum also clarifies that nothing in the Franchise Disclosure Document or agreements can reduce any of the franchisee's rights as provided for in Minnesota Statutes, Chapter 80C, or the franchisee's rights to any procedure, forum, or remedies provided by the laws of the jurisdiction. This further reinforces the protection afforded to Endless Summer Sweets franchisees operating in Minnesota.