Minnesota franchise termination law: 90 days' notice and a 60-day cure

What Minnesota Statutes 80C.14 says about good cause, 90 days' written notice, a 60-day cure, 180 days for non-renewal, and the three-year limit on suits.

Minnesota's rule is written as a two-part test. A franchise may not be terminated or cancelled unless the franchisor has given written notice setting out all the reasons at least 90 days in advance, and the recipient fails to correct the reasons stated within 60 days of receipt of the notice (Minn. Stat. 80C.14 subd. 3(a)). Termination also needs good cause (subd. 3(b)). The notice and the franchise agreement control a reader's own dates, and a Minnesota lawyer can advise on them.

How the clock runs, step by step

The franchisor sends written notice stating all the reasons for the termination or cancellation.
The recipient has 60 days from receipt to correct the reasons stated in the notice.
Termination may not take effect until at least 90 days after the notice was given.
If the reasons were corrected within the 60 days, the statute's condition for termination is not met.

What counts as good cause

No person may terminate or cancel a franchise except for good cause. The statute defines good cause as failure by the franchisee to substantially comply with the material and reasonable franchise requirements imposed by the franchisor, including, but not limited to, bankruptcy or insolvency, an assignment for creditors, voluntary abandonment, a conviction or plea relating to the franchise business, and conduct that materially impairs the franchisor's goodwill. The word list is not exclusive.

Notices that take effect immediately

The 90-day and 60-day periods do not apply where the alleged grounds are voluntary abandonment, a conviction of the franchisee of an offense directly related to the business, or failure to cure a default that materially impairs the goodwill associated with the franchisor's trade name after the franchisee received written notice to cure of at least 24 hours in advance. In those cases the notice is effective immediately on receipt. See incurable defaults.

Non-renewal

A franchisor may not fail to renew unless the franchisee has been given written notice of the intention not to renew at least 180 days before expiry, and has had a chance to operate long enough to recover the fair market value of the franchise as a going concern (80C.14 subd. 4). A franchisor may not refuse renewal in order to convert the premises to a company-owned operation. Separately, subd. 5 calls it unfair and inequitable to unreasonably withhold consent to a transfer when the substitute franchisee meets the present qualifications. See franchise non-renewal explained.

Coverage

Sections 80C.01 to 80C.22 cover a franchise defined as an agreement granting the right to do business under the franchisor's mark, with a community of interest and a franchise fee. Section 80C.19 says they apply when a sale or offer is made in Minnesota, when an offer to purchase is made and accepted in the state, or when the franchise is to be located in the state. Whether the reader's franchise fits is for the reader or a lawyer to check. This page gives no verdict.

Remedies, time limit and waivers

Topic	What the statute says	Section
Damages and fees	Franchisee may sue for damages, rescission or other relief; actual damages plus costs, disbursements and reasonable attorney's fees; controlling persons, officers and certain employees jointly and severally liable	80C.17
Time limit	No action more than three years after the cause of action accrues	80C.17 subd. 5
Injunction	Violations of 80C.14 can be enjoined; a temporary injunction needs no bond; irreparable harm is presumed only where the violator was required to register and did not	80C.14 subd. 1
Waivers	Provisions waiving compliance, including choice-of-law clauses, are void for Minnesota residents and for franchises operated in Minnesota	80C.21

Forum selection is not mentioned in the text of 80C.21 that was read.

Questions to look for in your own notice and agreement

Does the notice say it gives all the reasons, and how many days until termination?
Does it give 60 days from receipt to correct, or a shorter time?
Does it rely on abandonment, a conviction or a goodwill-impairing default with 24 hours to cure?
For a non-renewal, was written notice sent at least 180 days before the expiry date?
What law does the agreement say governs it?
When did the events you might complain about happen, measured against the three-year limit?