What is the effect of the Indiana Acts on provisions in the Better Blend franchise agreement that are not in compliance with the Acts?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
Any provision of the Agreement which would have any of the following effects is hereby modified to the extent required for the Agreement to be in compliance with the Indiana Acts:
- (1) Requiring goods, supplies, inventories, or services to be purchased exclusively from the franchisor or sources designated by the franchisor where such goods, supplies, inventories, or services of comparable quality are available from sources other than those designated by the franchisor.
However, the publication by the franchisor of a list of approved suppliers of goods, supplies, inventories, or services or the requirement that such goods, supplies, inventories, or services comply with specifications and standards prescribed by the franchisor does not constitute designation of a source nor does a reasonable right of the franchisor to disapprove a supplier constitute a designation.
This subdivision does not apply to the principal goods, supplies, inventories, or services manufactured or trademarked by the franchisor.
(2) Allowing the franchisor to establish a franchisor-owned outlet engaged in a substantially identical business to that of the franchisee within the exclusive territory granted the franchisee by the franchise agreement; or, if no exclusive territory is designated, permitting the franchisor to compete unfairly with the franchisee within a reasonable area.
(3) Allowing substantial modification of the franchise agreement by the franchisor without the consent in writing of the franchisee.
(4) Allowing the franchisor to obtain money, goods, services, or any other benefit from any other person with whom the franchisee does business, on account of, or in relation to, the transaction between the franchisee and the other person, other than for compensation for services rendered by the franchisor, unless the benefit is promptly accounted for, and transmitted to the franchisee.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2024 FDD)
According to Better Blend's 2024 Franchise Disclosure Document, the Indiana Rider to the Franchise Agreement modifies any provision of the agreement that would have certain effects, ensuring compliance with the Indiana Franchise Act and the Indiana Deceptive Franchise Practices Act (collectively, the "Indiana Acts").
Specifically, the rider modifies provisions that: require franchisees to purchase goods exclusively from Better Blend or its designated sources when comparable quality goods are available elsewhere (except for principal goods manufactured or trademarked by Better Blend); allow Better Blend to establish a company-owned outlet engaged in a substantially identical business within the franchisee's exclusive territory or compete unfairly without an exclusive territory; allow substantial modification of the franchise agreement by Better Blend without the franchisee's written consent; or allow Better Blend to obtain undisclosed benefits from the franchisee's business dealings with other parties.
In practical terms, this means that if any part of the standard Better Blend franchise agreement conflicts with these protections under Indiana law, that part of the agreement is automatically adjusted to align with Indiana law. This provides Better Blend franchisees in Indiana with additional legal safeguards regarding sourcing, territorial protection, contract modifications, and financial transparency.