Minnesota Franchise Law and FDD Registration

Minnesota Franchise and FDD Registration FAQs

Who Regulates Franchises in Minnesota?

The Securities Division of the Minnesota Department of Commerce oversees franchise filings, FDD registrations, and the enforcement of the Minnesota Franchise Act.

What Should I Include with My FDD Registration Application?

Your franchise registration application should include:

• Franchise application fee payable to "Minnesota Department of Commerce" in the amount of $400 for initial registration applications or $300 for renewal applications in which there have been substantive changes made to the FDD;

• Uniform Franchise Registration Application with Certification form;

• Franchisor’s Cost and Sources of Funds;

• Sellers Disclosure Form;

• Accountant consent letter to audited financial statements;

• One complete hard copy of the FDD (do not staple or bind the FDD); and

• One complete hard copy of the FDD marked to show changes (do not staple or bind the FDD).

Where Do I File My Minnesota FDD Registration Application?

Your FDD registration application must be filed at the following address:

Minnesota Department of Commerce
Securities-Franchise Registration
85 7th Place East, Suite 280
St. Paul, MN 55101-2198

Their phone number is (651) 539-1500.

Does Minnesota Offer Online FDD Filing?

Yes, but only for renewal and amendment FDD filings. Initial FDD registration applications must be submitted by mail. The Commerce Department’s electronic FDD filing system is known as ComOnline and may be used for FDD renewals and amendments.

How Long Will It Take for My Registration Application to Be Approved?

FDD registration in the State of Minnesota typically takes 3 to 4 weeks. Confirmation of your registration application takes place through the Department’s date-stamped mailing of your original cover letter back to you. It is recommended that you also call the Department to confirm registration status. Typically, the Department does not evaluate the disclosures contained in your FDD, and it is critically important to ensure that your FDD complies with the Minnesota Franchise Act.

What Is the Definition of a Franchise Under Minnesota Law?

Under the Minnesota Franchise Act, a "franchise" is defined as:

• any relationship, whether by written or oral agreement where

• the franchisee is granted the right to engage in the business of offering or distributing goods or services using the franchisor's trade name, trademark, service mark, logotype, advertising, or other commercial symbol or related characteristics;

• the franchisor and franchisee have a community of interest in the marketing of goods or services at wholesale, retail, by lease, agreement, or otherwise; and

• for which the franchisee pays, directly or indirectly, a franchise fee.

The Minnesota statute also defines other relationships that may qualify as a franchise.

Does Minnesota Have Franchise Relationship Laws?

Yes. Under the Minnesota Franchise Act, there are various provisions that afford supplemental rights to franchisees and that prohibit certain franchise agreement provisions and practices. Some of these franchise relationship provisions include the following:

• Litigation and Liquidated Damage Prohibitions - Franchisors are prohibited from requiring litigation to be conducted outside of the State of Minnesota. Also, franchise agreement provisions requiring franchisees to waive the right to a jury trial, and provisions requiring franchisees to consent to liquidated damages, are prohibited.

• Franchisee Termination and Non-renewal Requirements - Except in certain circumstances, the Minnesota Franchise Act places stringent requirements on a franchisor’s termination of a franchise agreement and a franchisor’s decision to not renew a franchise. Generally, a franchisor must give a franchisee 90 days’ notice of termination with a 60-day right to cure; and in instances of the non-renewal of a franchise agreement, a franchisor must provide the franchisee with 180 days’ notice of non-renewal.

General Release and Other Prohibitions - The Minnesota Franchise Act prohibits franchise agreement provisions that require franchisees to sign general releases. Also, provisions requiring a franchisee’s consent to injunctive relief are prohibited; and provisions limiting a franchisee’s claims are subject to requirements of the Franchise Act.