In Minnesota, can Fly To Fit require a franchisee to consent to liquidated damages?

According to Fly To Fit's 2024 Franchise Disclosure Document, in the state of Minnesota, Fly To Fit is prohibited from requiring a franchisee to consent to liquidated damages. This information is detailed in the Minnesota Addendum to the Disclosure Document.

This means that any clause in the standard franchise agreement that stipulates pre-determined damages payable by the franchisee to Fly To Fit upon termination or breach of contract may not be enforceable in Minnesota. Minnesota Statutes, Section 80C.21 and Minnesota Rules 2860.4400(J) explicitly disallow franchisors from including such requirements in their agreements within the state.

For a prospective Fly To Fit franchisee in Minnesota, this is a beneficial provision. It protects them from potentially unfair or excessive financial penalties if the franchise relationship ends prematurely or if there is a dispute. Franchisees should ensure that the franchise agreement complies with Minnesota law and does not contain clauses that contravene these protections.

It is important for potential franchisees to consult with legal counsel to ensure full compliance with Minnesota franchise laws and to understand their rights and obligations under the franchise agreement.