Can Pearce Bespoke require franchisees to consent to termination penalties under Minnesota law?
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.
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- 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.
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- 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. In addition, nothing in this Franchise Disclosure Document or agreement(s) shall abrogate or reduce (1) any of your rights as provided for in Minn. Stat. Chapter 80C or (2) your rights to any procedure, forum, or remedies provided for by the laws of the jurisdiction.
- (b) In accordance with Minn. Stat. § 80C.14 subd. 3-5, except in certain specified cases, we will give you 90 days notice of termination (with 60 days to cure) and 180 days notice for nonrenewal of the Franchise Agreement. Additionally, we will not unreasonably withhold our consent to a transfer of your Board and Brush Creative Studio.
- (c) In accordance with Minnesota Rules 2860.4400(D), we cannot require you to assent to a general release.
- (d) In accordance with Minnesota Rules 2860.4400(J), we cannot require you to consent to liquidated damages.
- (e) Minn. Stat. § 80C.17 subd. 5 requires that an action be commenced pursuant to the Franchise Act within three (3) years after the cause of action accrues.
- (f) You cannot consent to us obtaining injunctive relief. We may seek injunctive relief. See Minnesota Rules 2860.4400(J),
- (g) No statement, questionnaire, or acknowledgement signed or agreed to by a franchisee in connectio
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to the 2025 Pearce Bespoke Franchise Disclosure Document, Pearce Bespoke is restricted from requiring franchisees in Minnesota to consent to termination penalties. Specifically, Minnesota Statutes § 80C.21 and Minnesota Rules § 2860.4400(J) explicitly prohibit Pearce Bespoke from mandating that franchisees agree to liquidated damages or termination penalties. This protection is in place to safeguard the rights of franchisees within the state.
This means that any clause within the franchise agreement that stipulates the franchisee's consent to termination penalties is unenforceable in Minnesota. The FDD emphasizes that nothing in the document or associated agreements can reduce any rights provided under Minn. Stat. Chapter 80C or the franchisee's rights to procedures, forums, or remedies available under Minnesota law. This ensures that franchisees operating in Minnesota are not subjected to unfair or overbearing contractual obligations.
Furthermore, Pearce Bespoke is also restricted from requiring franchisees to conduct litigation outside of Minnesota or demanding a waiver of a jury trial. These stipulations reinforce the state's commitment to protecting franchisees' legal rights and ensuring fair business practices within the franchise system. Prospective franchisees should be aware of these protections and consult with legal counsel to fully understand their rights under Minnesota law.