Under Indiana Code, what constitutes unlawful termination of a Bang Cookies franchise?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
A. Indiana Code 23-2-2.7-1(7) makes unlawful unilateral termination of a franchise unless there is a material violation of the Franchise Agreement and termination is not in bad faith.
- B. Indiana Code 23-2-2.7-1(5) prohibits a prospective general release of claims subject to the Indiana Deceptive Franchise Practices Law.
- C. ITEM 17(r) is amended subject to Indiana Code 23-2-2.7-1(9) to provide that the post-term noncompetition covenant shall have a geographical limitation of the territory granted to Franchisee.
- D. ITEM 17(v) is amended to provide that Franchisees will be permitted to commence litigation in Indiana for any cause of action under Indiana Law.
- E. ITEM 17(w) is amended to provide that in the event of a conflict of law, Indiana Law governs any cause of action that arises under the Indiana Disclosure Law or the Indiana Deceptive Franchise Practices Act.
Source: Item 23 — RECEIPTS (FDD pages 56–245)
What This Means (2024 FDD)
According to Bang Cookies's 2024 Franchise Disclosure Document, specifically the Indiana FDD Amendment, Indiana Code 23-2-2.7-1(7) defines unlawful unilateral termination of a franchise. This code states that Bang Cookies cannot terminate a franchise unless the franchisee has committed a material violation of the Franchise Agreement. Furthermore, the termination must be carried out in good faith.
In simpler terms, Bang Cookies must have a legitimate and significant reason to terminate the franchise agreement, such as the franchisee's failure to meet contractual obligations. The termination cannot be arbitrary, discriminatory, or based on malicious intent. This provision protects franchisees from unfair or opportunistic terminations by Bang Cookies.
This Indiana code also affects other aspects of the franchise agreement. Indiana Code 23-2-2.7-1(5) prohibits requiring a prospective general release of claims that would be subject to the Indiana Deceptive Franchise Practices Law. Additionally, Item 17(r) of the franchise agreement, concerning post-term noncompetition covenants, is amended to limit the geographical scope to the territory granted to the franchisee, as per Indiana Code 23-2-2.7-1(9). Franchisees are also permitted to commence litigation in Indiana for any cause of action under Indiana Law, and Indiana Law governs any cause of action that arises under the Indiana Disclosure Law or the Indiana Deceptive Franchise Practices Act in the event of a conflict of law.