What specific Indiana law regarding franchise termination is referenced in the Beauty Bungalows FDD?

According to Beauty Bungalows' 2025 Franchise Disclosure Document, Indiana Code 23-2-2.7-1(7) addresses franchise termination. Specifically, this Indiana law makes it unlawful for Beauty Bungalows to unilaterally terminate a franchise agreement unless there is a material violation of the agreement and the termination is not done in bad faith. This provision is designed to protect franchisees from arbitrary or unfair termination by the franchisor.

This means that Beauty Bungalows franchisees in Indiana have additional legal protection against termination compared to franchisees in states without such laws. A material violation typically refers to a significant breach of the franchise agreement terms, such as failure to pay royalties or adhere to brand standards. The "not in bad faith" clause means the termination must be based on legitimate business reasons and not motivated by malice or an attempt to unfairly seize the franchisee's business.

Furthermore, the FDD states that this Indiana law supersedes any conflicting provisions in the standard franchise agreement. This ensures that the protections afforded by Indiana law take precedence over any potentially contradictory terms in the franchise agreement, strengthening the franchisee's position. Prospective Beauty Bungalows franchisees in Indiana should carefully review the franchise agreement and understand their rights under Indiana Code 23-2-2.7-1(7) to ensure they are fully aware of the conditions under which their franchise can be terminated.