Under Indiana law, what constitutes an unlawful unilateral termination of a Beard Papas franchise agreement?

According to Beard Papas's 2025 Franchise Disclosure Document, Indiana law stipulates specific conditions regarding the termination of a franchise agreement. Indiana Code 23-2-2.7-1(7) states that it is unlawful for Beard Papas to unilaterally terminate a franchise agreement unless the franchisee has materially violated the agreement and the termination is not done in bad faith. This provision protects franchisees from arbitrary or unfair terminations by ensuring that there must be a legitimate and substantial reason for ending the agreement.

For a prospective Beard Papas franchisee in Indiana, this means that the franchise agreement cannot be terminated without due cause. The "material violation" clause implies that the violation must be significant enough to warrant termination, rather than a minor or easily rectifiable issue. The "not in bad faith" clause further protects the franchisee by ensuring that Beard Papas cannot use termination as a means of acting maliciously or unfairly.

This Indiana-specific amendment to Item 17 of the FDD provides an additional layer of security for franchisees operating in Indiana. It aligns with common franchise law principles that aim to balance the rights and responsibilities of both the franchisor and franchisee, preventing potential abuses of power by the franchisor. Franchisees should carefully review the full Indiana Code and consult with legal counsel to fully understand their rights and obligations under Indiana law.