Under Minnesota law, can Fitstop unreasonably withhold consent to the transfer of a franchise?

According to Fitstop's 2024 Franchise Disclosure Document, Minnesota Statute § 80C.14, subdivisions 3, 4, and 5, which governs franchises in Minnesota, states that Fitstop's consent to the transfer of a franchise will not be unreasonably withheld. This protection applies specifically to franchises governed by Minnesota law. This statute also requires 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, except in certain specified cases.

This means that if a Fitstop franchisee in Minnesota wants to sell or transfer their franchise to someone else, Fitstop cannot arbitrarily deny the transfer. They must have a reasonable basis for withholding their consent. What constitutes "unreasonable" is not defined in the FDD, but it generally means that the franchisor's decision must be based on objective criteria and not on personal preferences or arbitrary reasons.

For a prospective Fitstop franchisee in Minnesota, this provision offers some protection and flexibility. It ensures that they can sell their business if they choose to, without being unfairly blocked by Fitstop. However, Fitstop still has the right to ensure that any potential buyer meets their standards and is capable of running the franchise successfully. Franchisees should carefully review the franchise agreement and any related documents to fully understand the conditions under which a transfer may be approved or denied.