Minnesota Session Laws - 1993, Regular Session

  
    Laws of Minnesota 1993 

                        CHAPTER 372-S.F.No. 1114 
           An act relating to commerce; regulating franchise 
          actions; regulating sales of private label goods; 
          amending Minnesota Statutes 1992, sections 80C.17, 
          subdivisions 1 and 5; and 80C.22, subdivision 7; 
          proposing coding for new law in Minnesota Statutes, 
          chapter 325F. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1992, section 80C.17, 
subdivision 1, is amended to read: 
    Subdivision 1.  A person who violates any provision of 
sections 80C.01 to 80C.13 and 80C.16 to 80C.22 this chapter or 
any rule or order thereunder shall be liable to the franchisee 
or subfranchisor who may sue for damages caused thereby, for 
rescission, or other relief as the court may deem appropriate. 
    Sec. 2.  Minnesota Statutes 1992, section 80C.17, 
subdivision 5, is amended to read: 
    Subd. 5.  No action may be commenced pursuant to this 
section more than three years after the franchisee pays the 
first franchise fee cause of action accrues.  
     Sec. 3.  Minnesota Statutes 1992, section 80C.22, 
subdivision 7, is amended to read: 
    Subd. 7.  Orders of the commissioner shall be served by 
mailing a copy thereof by certified mail to the most recent 
address of the recipient of the order as it appears in the files 
of the commissioner.  Subpoenas shall be served in the same 
manner as provided in civil actions in the district courts. 
    Sec. 4.  [325F.985] [DEFINITIONS.] 
    Subdivision 1.  [SCOPE.] For the purpose of sections 
325F.986 and 325F.987, the terms defined in this section have 
the meanings given them. 
    Subd. 2.  [PRIVATE LABEL GOODS.] "Private label goods" 
means goods that are the subject of a private label purchase or 
agreement for private label purchase. 
    Subd. 3.  [PRIVATE LABEL PURCHASE.] "Private label purchase"
means a purchase of goods from a manufacturer for resale under a 
brand, trademark, or other commercial indicia that identifies 
the private label purchaser or its assignee as the origin of the 
goods for purposes of their resale.  
    Subd. 4.  [PRIVATE LABEL PURCHASER.] "Private label 
purchaser" means a person who makes a private label purchase 
from a manufacturer. 
    Subd. 5.  [EXCLUSIVITY AGREEMENT.] "Exclusivity agreement" 
means an agreement for private label purchases which precludes 
the manufacturer of the private label goods from selling similar 
goods as private label goods to any third person within a 
defined geographical territory. 
    Sec. 5.  [325F.986] [EXCLUSIVITY AGREEMENTS.] 
    Subdivision 1.  [WRITING REQUIRED.] Every exclusivity 
agreement must be in writing and signed by the party against 
whom the agreement is sought to be enforced. 
    Subd. 2.  [OBLIGATION.] A lawful exclusivity agreement 
imposes, unless otherwise provided in the agreement, an 
obligation by the private label purchaser to use reasonable 
efforts in the development and promotion of the sale of the 
private label goods within the geographical territory covered by 
that exclusivity agreement. 
    Sec. 6.  [325F.987] [LIMITATION ON ACTIONS.] 
    No private label purchaser having the obligation, under 
section 325F.986 or otherwise, to use reasonable efforts in the 
development and promotion of the sale of private label goods is 
entitled, absent the employment of reasonable efforts, to 
maintain an action, suit, or proceeding at law, in equity, in 
arbitration, or otherwise, to prevent the manufacturer of 
private label goods from selling similar goods as private label 
goods to any third person.  This attempt to prevent sales of 
private label goods by the manufacturer to a third person, in 
the absence of the purchaser's employment of reasonable efforts, 
is considered an unreasonable restraint of trade. 
    Sec. 7.  [325F.988] [NONAPPLICATION.] 
    Sections 325F.985 to 325F.987 do not apply to private label 
goods manufactured according to the purchaser's proprietary 
specifications.  Sections 325.986 and 325.987 shall not be 
construed to grant a private label manufacturer any rights of 
ownership or use of a brand, trademark or commercial indicia 
that is owned by another person including a private label 
purchaser or its assignee. 
    Sec. 8.  [EFFECTIVE DATE.] 
     Sections 1 and 2 apply to all franchise contracts or 
franchise transfer agreements entered into or renewed on or 
after the effective date, and apply as of July 1, 1993, to 
franchise contracts in effect on the effective date that have no 
expiration date. 
     Sections 4 to 7 apply to all agreements for private label 
purchases entered into or renewed on or after July 1, 1993, and 
to all private label purchases occurring on or after that date. 
    Presented to the governor May 20, 1993 
    Signed by the governor May 24, 1993, 5:49 p.m.