In Minnesota, can Mr. Sandless require a franchisee to consent to liquidated damages?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
ified cases, that a franchisee be given 90 days' notice of termination (with 60 days to cure) and 180 days' notice for non-renewal of the Disclosure Document."
- Item 17 of the Disclosure Document and Article 24 of the Franchise Agreement are amended by the addition of the following language to the original language that appears therein:
"Minn. Stat. Sec. 80C.21 and Rule 2860.4400J 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 agreements can abrogate or reduce any of the franchisee's rights as provided for in Minnesota Statutes, Chapter 80C, or franchisee's rights to any procedure, forum, or remedies provided for by the laws of jurisdiction."
- Item 17 of the Disclosure Document and Articles 3 and 21 of the Franchise Agreement are amended by the addition of the following language to the original language that appears therein:
"Minn. Rule 2860.4400D prohibits us from requiring you to assent to a general release."
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 30–34)
What This Means (2025 FDD)
According to Mr. Sandless's 2025 Franchise Disclosure Document, Minnesota law prohibits Mr. Sandless from requiring a franchisee to consent to liquidated damages. Specifically, Minn. Stat. Sec. 80C.21 and Rule 2860.4400J explicitly forbid franchisors from including such requirements in their franchise agreements within the state of Minnesota. Furthermore, any existing references to liquidated damages within the standard Franchise Agreement are considered deleted for Minnesota franchisees, ensuring compliance with state regulations. This protection extends to preventing the waiver of jury trials and safeguarding the franchisee's rights as provided under Minnesota Statutes, Chapter 80C.
This means that if you are considering opening a Mr. Sandless franchise in Minnesota, you cannot be forced to agree to liquidated damages, which are essentially penalties for terminating the agreement early or not meeting certain obligations. This is a significant benefit for franchisees as it limits potential financial risks associated with the franchise agreement.
This provision ensures that Minnesota franchisees retain all rights and remedies available under state law, preventing Mr. Sandless from imposing unfair or restrictive terms. The FDD explicitly states that nothing in the document or related agreements can reduce or abrogate any of the franchisee's rights as provided by Minnesota law. This offers a layer of protection and recourse for franchisees operating within the state, ensuring they are not subject to terms that would otherwise be permissible in other states without such specific regulations.