Can Pearce Bespoke require franchisees to consent to liquidated damages under Minnesota law?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
r 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 liquidated damages, termination penalties or judgment notes.
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to the 2025 Pearce Bespoke Franchise Disclosure Document, Pearce Bespoke is prohibited from requiring franchisees to consent to liquidated damages in Minnesota. This protection is explicitly stated in an amendment to Item 17 of the FDD, referencing Minn. Stat. § 80C.21 and Minnesota Rules § 2860.4400(J).
This means that Pearce Bespoke franchisees in Minnesota cannot be forced to agree to clauses in their franchise agreement that would predetermine the amount of damages owed in the event of a breach. Minnesota law aims to protect franchisees from potentially unfair or overreaching terms imposed by the franchisor.
This provision ensures that any damage claims by Pearce Bespoke against a Minnesota franchisee would need to be substantiated and proven in court or through other legal means, rather than being based on a pre-agreed, potentially excessive, liquidated damages amount. This protection is specific to Minnesota and reflects the state's regulatory stance on franchise agreements.