In Hockey Enter., Inc., v. Total Hockey Worldwide, LLC, 2011 U.S. Dist. LEXIS 2201 (D. Minn. Jan. 10, 2011), a Minnesota federal court dismissed a Florida franchisee’s claim against franchisor Total Hockey Worldwide, LLC, its parent, and a number of its officers for breach of the Minnesota Franchise Act. A Florida-based franchisee of two hockey-training businesses had filed suit against the Total Hockey defendants alleging, among other things, that they violated the Minnesota Franchise Act by failing to register the franchisor in Minnesota and making several false representations that induced the franchisee to purchase the franchises. Despite a Florida choice of law provision contained in the franchise agreements, the franchisee argued that the Minnesota-based Total Hockey defendants were liable for violations under the Minnesota Franchise Act because Minnesota law did not permit waiver of rights secured by the statute.
In rejecting the franchisee’s argument, the court found that the statute’s anti-waiver provision protected only a person who was a Minnesota resident (or Minnesota corporation) at the time that person or organization acquired a franchise, or a person (regardless of residence) who was acquiring a franchise that would operate in Minnesota. The corporate franchisee was not organized or incorporated in Minnesota, and the franchises at issue were to be operated in Florida. Accordingly, the court found that the Minnesota anti-waiver provision did not void the parties’ Florida choice of law provision and dismissed the claim under the act.
The information contained in this post is provided to alert you to legal developments and should not be considered legal advice. It is not intended to and does not create an attorney-client relationship. Specific questions about how this information affects your particular situation should be addressed to one of the individuals listed. No representations or warranties are made with respect to this information, including, without limitation, as to its completeness, timeliness, or accuracy, and Lathrop GPM shall not be liable for any decision made in connection with the information. The choice of a lawyer is an important decision and should not be based solely on advertisements.
About this Publication
The Franchise Memorandum is a collection of postings on summaries of recent legal developments of interest to franchisors brought to you by Lathrop GPM LLP.
To subscribe to monthly emails for The Franchise Memorandum, please click here.