Franchise and Distributor Disputes Under Minnesota Law

Franchise, distributor and sales representative relationships are all regulated under Minnesota law.

If Minnesota law applies, the Minnesota Franchise Act requires franchisors to register and properly disclose the nature of the franchise business to prospective franchisees. Minn. Stat. § 80C.01 et seq. Thereafter, during the course of the franchise relationship, franchisors must abide by certain rules.  Probably the most important rule is that a franchisor may not terminate a franchise relationship with a franchisee without first providing the franchisee with written notice of the deficiency and an opportunity to cure (except in certain circumstances where the franchisor may immediately terminate the franchisee).

Certain distributor relationships are also regulated in Minnesota.  For example, agricultural implement and heavy equipment dealer relationships are regulated, Minn. Stat. §§ 325E.05 and 325E.068, motor vehicle dealer relationships,  Minn. Stat. § 80E.01 et seq., and beer and motor fuel dealers.  Minn. Stat. §§ 325B.01 and 80C.145.    In general, the statutes prevent the dealer from being terminated arbitrarily.

Finally, sales representatives have certain statutory rights. Minn. Stat. § 325E.37.  If the statute applies, the principal may not terminate the sales representative absent “good cause” and without first providing the sales representative with notice of deficiency,  and an opportunity to cure.

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