Business owners who bought into a franchise often wonder, “Can I sell my business?” In short, yes, you can. The Minnesota Franchise Act specifically entitles you to sell your business. This cannot be overruled by your franchise agreement. You may have to pay a reasonable transfer fee. Can a Minnesota Franchise Be Sold? Yes. The sale…
In Minnesota, franchises are covered by the Minnesota Franchise Act. While this article is not an all-encompassing discussion of the nuances surrounding this area of law, it does discuss one key area: if a business is determined to be a franchise, which is offered in Minnesota, the franchisor is required to register that franchise; failing to register opens…
Minnesota’s Franchise Act (“MFA”) was created to protect franchisees due to a perceived lack of bargaining power with a franchisor. Under the MFA, a franchise is defined as “a contract of agreement, either express or implied,” “whether oral or written,” “for a definite or indefinite period, between two or more persons”: (1) by which a…
Three Elements of Operating a Franchise in Minnesota Operating a franchise involves the combination of these three elements: A license to use a trade or service mark, The payment of a fee by the franchisee to the franchise for the right to enter a business, and Community interest’s, marketing plan or some element of control…
Remedies for Violations of Minnesota Franchise Act Under the Minnesota Franchise Act (MFA) there is a private right of action for franchisees, and anyone who violates the MFA is liable to the franchisee. There are a number of different ways the franchisee can sue for violations through the MFA, including damages, recision, or other relief….
Privacy torts were not recognized until the 1998 case, Lake v. Walmart Stores. The Lake decision finally recognized the privacy torts of appropriation, intrusion upon seclusion, and public disclosure. However, Chief Justice Blatz noted: We decline to recognize the tort of false light publically at this time. We are concerned that claims under false light…
Sample Franchise Disclosure Document Does failure to provide mandated disclosure documents vitiate a subsequent franchise agreement? Yes. Under Minnesota law, a franchisee is entitled to rescind the franchise agreement if he or she chooses to do so. Federal Law Regulating the Sale of Franchises There are both federal and state laws that regulate the sale…
Related disclosure document posts: Franchise Rule Disclosure Compliance Obligations Ways of Furnishing Disclosure Documents Sample Franchise Agreement / Disclosure Document When Must Disclosure Documents Be Furnished? Does failure to provide mandated disclosure documents prior to the entering into a franchise agreement vitiate the subsequent agreement? Federal Laws Regarding the Sale of Franchises Both federal and…
When you buy a franchise, you often can sell goods and services that have instant name recognition, and get training and support that can help you succeed. But purchasing a franchise is like every other investment: there’s no guarantee of success. The Federal Trade Commission, the nation’s consumer protection agency, has prepared this booklet to…
A Ticking Time-Bomb: the Accidental Franchise Could your license agreement actually be considered a franchise agreement? A license agreement that qualifies as a franchise agreement can have devastating effects on your business venture. In short, everyone you have done business with is entitled to rescind their transaction and you could face potential felony charges. The…
As a franchise attorney, I have seen the work of a number of franchise attorneys. If I were to have a conflict of interest and had to refer a franchisor or franchisee to another franchise attorney, a few local franchise attorneys stand out in my mind. These franchise attorneys understand franchise law well and would…
Franchise Law in Minnesota is governed by the Minnesota Franchise Act set out in Minnesota Statutes § 80C. A franchise is established when a franchisor (person selling or offering to sell a franchise) allows a franchisee (person given the rights to operate franchise) to operate a business using the franchisor’s trade name, logo, advertising, symbols,…
View more videos on franchising In this video, Minnesota franchise attorney Aaron Hall explains the factors that can indicate a successful franchise; one which you may want to buy into. When looking into buying a franchise, it is important to identify: What are the initial fees to buy into the franchise? What are the…
In this video, Minnesota franchise attorney Aaron Hall talks about what you should watch out for before buying into a franchise, and how you should research a franchise before buying into it. Click here for more videos on franchising in Minnesota. Research the Franchise Talk to other franchisees of the franchise to learn about their…
In this article, Minnesota franchise attorney Aaron Hall defines the franchisor, the franchisee, and their relationship, explains the different types of franchise fees, and identifies an important way to learn more about a franchise opportunity as part of your “due diligence” before buying a franchise. The Franchise Relationship People who are looking at buying a…
In Minnesota, a franchise is a popular way of starting or growing a business. Franchises include product and service companies. Special laws have been created to protect business owners buying into a franchise. For more information, see our franchising tips videos Minnesota Franchise Laws Many states, such as Minnesota, have strict franchise laws. Minnesota has…
Franchise Law in Minnesota Franchise Law in Minnesota is governed by the Minnesota Franchise Act set out in Minnesota Statutes § 80C. A franchise is established when a franchisor (person selling or offering to sell a franchise) allows a franchisee (person given the rights to operate franchise) to operate a business using the franchisor’s trade…
This article explains requirements for a franchisor starting a franchise in Minnesota. If you buying a franchise, visit tips on buying a franchise in Minnesota. Item 23: Receipts Like the UFOC Guidelines, the amended Rule requires franchisors to obtain a signed receipt for the disclosure document furnished to each prospective franchisee. To facilitate electronic disclosures, the definition…
Additional Prohibitions In addition to the prohibitions concerning the making of financial performance representations, discussed above, the amended Rule prohibits seven specific acts or practices. Each of the seven is discussed immediately below. Prohibition Against Contradictory Information The amended Rule prohibits a franchise seller from making any statement that contradicts the information disclosed in the…
Federal Exemptions (15 United States Code § 77) Small Offerings – Regulation A Regulation A (17 Code of Federal Regulations § 230.251 to § 230.262) permits the offering of up to $5 million of securities in a year without complying with all registration and disclosure requirements. If the Regulation A exemption is available, a shorter…
Item 18: Public Figures Item 18 of the amended Rule requires the disclosure of certain information about a public figure’s involvement in the franchise system. This covers public figures who lend their name or image to the franchise, control or manage the franchisor, or invest in the franchisor. Who Qualifies as a “Public Figure”? A…
Item 22: Franchise Contracts Item 22 of the amended Rule requires franchisors to attach a copy of all proposed agreements relating to the franchise offering that the franchisor provides or for which the franchisor makes arrangements. These include not only the franchise agreement, but leases, options, financing agreements, and purchase agreements. These attachments are part…
Sample Item 16: Restrictions on What the Franchisee May Sell The following is an example franchise disclosure document for Amended Franchise Rule’s Item 16. For more information, see this explanation of the Amended Franchise Rule’s Item 16. ITEM 16: RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL We require you to offer and sell only those…
A franchise is an agreement or contract between two or more persons by which the franchisor, for a fee, gives the franchisee 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. Both the franchisor and the…
Drafting the Document Standard franchise forms are available from the State of Minnesota or by fax from the Fax Forms library at (651) 296-2803 or by mail from the Secretary of State. While these forms are designed to meet minimum requirements of the law, they are not intended to address every possible situation. Consultation with an…
At What Point in The Sales Process Must a Franchisor Furnish The Disclosure Document? The amended Rule provides that franchisors must furnish prospective franchisees with a disclosure document at least 14 calendar days before the prospective franchisee signs a binding agreement with, or makes any payment to, the franchisor or an affiliate in connection with…
Ways of Furnishing Disclosure Documents The amended Rule expressly permits franchisors to furnish disclosure documents by any method they wish, including electronically. While a disclosure document must still be “in writing,” that term is defined broadly as “any document or information in printed form or in any form capable of being preserved in tangible form…
Apportionment is a key feature of state corporate taxes Apportionment formulas are important features of state corporate income taxes. They determine how much of a business’s income is taxable and affect the incidence and competitiveness of the tax. Minnesota apportions corporate income using the Minnesota proportions of the corporation’s sales, payroll, and property factors to…
Item 15: Obligation to Participate in the Actual Operation of the Franchise Business Item 15 of the amended Rule requires franchisors to disclose whether franchisees are required to participate personally in the direct operation of the franchise. Among other things, the amended Rule’s Item 15 calls for disclosures stating: any obligation for the franchisee to…
Definition of Franchising Franchising is a method of marketing and distributing goods and services. Franchises are offered and sold for many types of businesses, including services, retail trade, finance, real estate, transportation, and communications. A franchise is broadly defined as a contract or agreement between two or more persons by which the franchisor (the seller),…
