Can Pearce Bespoke require a franchisee in Minnesota to consent to liquidated damages?

According to the 2025 Pearce Bespoke Franchise Disclosure Document, Pearce Bespoke cannot require a franchisee in Minnesota to consent to liquidated damages. This protection is explicitly stated in the addendum to the Franchise Agreement required by the state of Minnesota. This addendum ensures that the franchise agreement adheres to the Minnesota Franchise Act and related regulations.

Specifically, Minnesota Rules 2860.4400(J) prohibits Pearce Bespoke from requiring a franchisee to consent to liquidated damages. This means that any clause within the standard franchise agreement that might suggest or mandate such consent is superseded by this state-specific rule for franchisees operating in Minnesota.

This provision is beneficial for prospective Pearce Bespoke franchisees in Minnesota, as it prevents the franchisor from imposing predetermined penalties (liquidated damages) without the franchisee's explicit agreement. This offers a layer of protection against potentially unfair or excessive financial burdens in the event of a dispute or termination of the franchise agreement. Franchisees should carefully review the Minnesota addendum to fully understand their rights and protections under state law.