How does Indiana law affect Beverly Anns Cookie's ability to terminate a franchise for cause?
Beverly_Anns_Cookie Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
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 impacts the company's ability to unilaterally terminate a franchise agreement within the state. Specifically, Indiana Code 23-2-2.7-1(7) prohibits Beverly Anns Cookie from unilaterally terminating a franchise without 'good cause' or in 'bad faith'. The FDD clarifies that 'good cause' is legally defined as including any material breach of the Franchise Agreement. This Indiana law supersedes any conflicting provisions in the standard Franchise Agreement that might allow for easier termination.
This means that for franchises operating in Indiana, Beverly Anns Cookie must demonstrate a material violation of the franchise agreement to legally justify termination. The termination must also be carried out in good faith, implying fair dealing and honest intent. This provides Indiana franchisees with greater protection against arbitrary or unfair termination, as the franchisor must adhere to a higher legal standard than might be outlined in the standard franchise agreement.
For a prospective Beverly Anns Cookie franchisee in Indiana, this is a beneficial provision. It ensures that the franchise agreement cannot be terminated without a legitimate and substantial reason, as defined by Indiana law. This offers a degree of security and recourse against potential overreach by the franchisor. However, franchisees must still be diligent in adhering to the terms of the franchise agreement to avoid providing grounds for termination due to material breach.