For Auntie Annes franchises sold in Indiana, what law supersedes conflicting provisions in the Franchise Agreement or other agreements?
Auntie_Annes Franchise · 2024 FDDAnswer from 2024 FDD Document
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- The laws of the State of Indiana supersede any provisions of the Franchise Agreement, or Georgia law if these provisions are in conflict with Indiana law. The Franchise Agreement will be governed by Indiana law, rather than Georgia law as stated in Section 22.5 (Applicable Law) of the Franchise Agreement.
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- Venue for litigation will not be limited to Georgia, as specified in Section 19.1 (Dispute Resolution) of the Franchise Agreement.
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- The prohibition by Indiana Code 23-2-2.7-1(7) against unilateral termination of the franchise without good cause or in bad faith, good cause being defined therein as "a material breach of the franchise agreement," will supersede the provisions of Section 17 (Default and Termination) of the Franchise Agreement in the State of Indiana to the extent they may be inconsistent with this prohibition.
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- No release language stated in the Franchise Agreement will relieve us or any other person, directly or indirectly, from liability imposed by the laws on franchising of the State of Indiana.
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- Section 15.4.B. (Post-Term) of the Franchise Agreement is revised to limit the geographical extent of the post-term covenant not to compete to an area of reasonable size for all franchises sold in the State of Indiana.
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- Section 15.5 (Remedies) of the Franchise Agreement will not apply to franchises offered and sold in the State of Indiana.
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- Notwithstanding the terms of Section 4 (Territorial Rights) of the Franchise Agreement, we will not compete unfairly with you within a reasonable area.
Source: Item 22 — CONTRACTS (FDD page 106)
What This Means (2024 FDD)
According to Auntie Annes's 2024 Franchise Disclosure Document, for franchises sold in Indiana, the laws of the State of Indiana take precedence over any conflicting provisions found in the Franchise Agreement or other related agreements. This also includes Georgia law, which is typically the governing law cited in the standard Franchise Agreement. This means that if any part of the Franchise Agreement contradicts Indiana law, Indiana law will be the controlling authority.
This safeguard ensures that Auntie Annes franchisees in Indiana are protected by Indiana's franchise laws, particularly the Indiana Franchise Disclosure Law and the Indiana Deceptive Franchise Practices Act. These laws address various aspects of the franchise relationship, including disclosure requirements, termination rights, and non-compete clauses. The Indiana addendum specifically amends certain sections of the standard Franchise Agreement to comply with Indiana law.
For prospective Auntie Annes franchisees in Indiana, this addendum offers significant protections. For example, the franchisor cannot enforce provisions related to governing law or venue for litigation that would force the franchisee to litigate outside of Indiana. Additionally, Indiana law limits the geographical scope of post-term non-compete covenants to a reasonable size. Furthermore, Indiana law prohibits unilateral termination of the franchise without good cause or in bad faith, superseding any conflicting terms in the termination section of the Franchise Agreement.
It is important for potential Auntie Annes franchisees in Indiana to carefully review the Indiana addendum in conjunction with the Franchise Agreement to fully understand their rights and obligations under Indiana law. Consulting with an attorney experienced in franchise law is highly recommended to ensure a complete understanding of the legal landscape and to navigate any potential conflicts between the standard agreement and Indiana-specific protections.