In Indiana, what is the effect of the definitions provided in the Better Blend Franchise Agreement on the Indiana Rider?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
- **1.
Definitions.** Capitalized terms used but not defined in this Rider have the meanings given in the Agreement.
The "Indiana Acts" means the Indiana Franchise Act and the Indiana Deceptive Franchise Practices Act.
- **2.
Certain Provisions Modified.** 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 the 2024 Better Blend Franchise Disclosure Document, the Indiana Rider modifies the franchise agreement to ensure compliance with Indiana law. The definitions outlined in the franchise agreement affect the Indiana Rider in that capitalized terms not specifically defined in the Rider itself carry the same meanings as those in the original agreement.
Specifically, the Indiana Rider defines "Indiana Acts" as the Indiana Franchise Act and the Indiana Deceptive Franchise Practices Act. The Rider then states that any provision in the Better Blend Franchise Agreement that conflicts with these Indiana Acts is modified to the extent necessary to ensure compliance. This modification extends to provisions related to exclusive purchasing requirements, franchisor-owned outlets, modifications to the franchise agreement, and benefits the franchisor receives from franchisee transactions.
For a prospective Better Blend franchisee in Indiana, this means that the standard terms of the franchise agreement are subject to certain adjustments to protect their rights under Indiana law. For example, Better Blend cannot mandate exclusive purchasing from specific suppliers if comparable goods are available elsewhere, preventing potential overpayment or limited supply options. Similarly, Better Blend's ability to open competing outlets or unilaterally change the franchise agreement is restricted, offering the franchisee greater security and control over their business. These modifications aim to create a fairer balance of power between the franchisor and franchisee within the state of Indiana.