How does Indiana law affect Beverly Anns Cookie's ability to terminate a franchise agreement?
Beverly_Anns_Cookie Franchise · 2025 FDDAnswer from 2025 FDD Document
Item 17 of the FDD is amended to add the following:
Indiana Code 23-2-2.7-1(7) makes it unlawful for us to unilaterally terminate your Franchise Agreement unless there is a material violation of the Franchise Agreement and termination is not in bad faith.
Indiana Code 23-2-2.7-1(5) prohibits us to require you to agree to a prospective general release of claims subject to the Indiana Deceptive Franchise Practices Act.
Despite anything to the contrary in the Franchise Agreement, the following provisions will supersede and apply to all Franchises offered and sold in the State of Indiana:
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- The prohibition by Indiana Code 23-2-2.7-1(7) against unilateral termination of the Franchise without good cause or in bad faith, good cause being defined under law as including any material breach of the Franchise Agreement, will supersede the provisions of the Franchise Agreement relating to termination for cause, to the extent those provisions may be inconsistent with such prohibition.
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- Any provision in the Franchise Agreement that would require you to prospectively assent to a release, assignment, novation, waiver or estoppel which purports to relieve any person from liability imposed by the Indiana Deceptive Franchise Practices Law is void to the extent that such provision violates such law.
Source: Item 23 — RECEIPTS (FDD pages 57–235)
What This Means (2025 FDD)
According to Beverly Anns Cookie's 2025 Franchise Disclosure Document, Indiana law places restrictions on the company's ability to unilaterally terminate a franchise agreement. Specifically, Indiana Code 23-2-2.7-1(7) states that Beverly Anns Cookie cannot unilaterally terminate a franchise agreement unless there is a material violation of the agreement by the franchisee and the termination is not done in bad faith. A material breach of the franchise agreement constitutes good cause for termination under Indiana law.
Furthermore, the FDD clarifies that Indiana law supersedes any conflicting provisions in the Franchise Agreement or the franchisor's choice of law. This means that if the standard Beverly Anns Cookie franchise agreement contains terms allowing for termination under conditions less stringent than a material breach, those terms will not be enforceable in Indiana. The Indiana Deceptive Franchise Practices Law takes precedence.
This protection for franchisees in Indiana ensures that Beverly Anns Cookie must have a legitimate and substantial reason to terminate a franchise agreement, preventing arbitrary or unfair terminations. It also means that any clause in the franchise agreement that requires a franchisee to agree to a release, assignment, novation, waiver, or estoppel that would relieve any person from liability imposed by the Indiana Deceptive Franchise Practices Law is void to the extent that such provision violates such law.