For Auntie Annes franchises in Indiana, what geographical restriction applies to the covenant not to compete as revised by the Indiana Addendum to the Personal Covenants Agreement?

According to Auntie Annes's 2024 Franchise Disclosure Document, the Indiana Addendum to the Personal Covenants Agreement revises the geographical extent of the covenant not to compete. Specifically, for all Auntie Annes franchises sold in Indiana, the covenant is limited to an area of "reasonable size."

This revision means that the standard post-term non-compete clause found in the Personal Covenants Agreement is modified for franchisees in Indiana. Instead of a potentially broad or strictly defined geographical area, the restriction is limited to a "reasonable size." What constitutes a "reasonable size" is not defined in the addendum, which introduces some ambiguity.

For a prospective Auntie Annes franchisee in Indiana, this is a potentially beneficial change. It suggests that the non-compete will not prevent them from operating a similar business too far away from their former Auntie Annes location. However, the lack of a precise definition also creates uncertainty. It would be prudent for potential franchisees to seek legal counsel to understand how Indiana courts interpret "reasonable size" in the context of non-compete agreements. Franchisees should also seek clarification from Auntie Annes regarding their interpretation of a reasonable area.