Can Pearce Bespoke require a franchisee in Minnesota to consent to termination penalties?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
development fee, and any other initial payment until all of our material pre-opening obligations have been satisfied and our business is open and operating. However, you must execute the Franchise Agreement prior to looking for a site or beginning training.
-
- Item 6, Non-Sufficient Funds Fee, is amended to state:
Pursuant to Minn. Stat. § 604.113, the Non-Sufficient Funds Fee is $30.00 per occurrence.
-
- Item 17 is amended to state:
- (a) Minn. Stat. § 80C.21 and Minnesota Rules § 2860.4400(J) prohibit us from requiring litigation to be conducted outside Minnesota, requiring waiver of a jury trial, or requiring you to consent to liquidate
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to Pearce Bespoke's 2025 Franchise Disclosure Document, Pearce Bespoke is restricted from requiring franchisees in Minnesota to consent to termination penalties. The FDD states that Minnesota Statutes § 80C.21 and Minnesota Rules § 2860.4400(J) explicitly prohibit Pearce Bespoke from requiring a franchisee to consent to liquidated damages or termination penalties. This protection is in place to safeguard the rights of franchisees within the state.
This means that a prospective Pearce Bespoke franchisee in Minnesota will not be obligated to agree to any clauses in the franchise agreement that impose financial penalties upon termination of the agreement. This provides a level of financial security and protection, ensuring that franchisees are not unduly burdened with additional costs if the franchise relationship ends.
Furthermore, the disclosure clarifies that nothing in the Franchise Disclosure Document or any related agreements can reduce any rights provided to the franchisee under Minn. Stat. Chapter 80C or their rights to any procedure, forum, or remedies available under Minnesota law. This reinforces the commitment to upholding franchisee rights and ensuring compliance with state regulations. This protection extends to preventing Pearce Bespoke from requiring litigation to be conducted outside Minnesota or requiring waiver of a jury trial.