How will Item 12, "Territory," be amended for Boulder Designs franchisees in Indiana?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
FOR THE STATE OF INDIANA
The Indiana Deceptive Franchise Practices Act requires that Indiana law govern any cause of action arising under the Indiana Franchise Disclosure Law or the Indiana Deceptive Franchise Practices Act and prohibits limiting litigation brought for breach of the agreement in any manner whatsoever;
Item 12, "Territory," shall be amended by the addition of the following paragraph: we will not compete unfairly with you within a reasonable area;
The Indiana Deceptive Franchise Practices Act makes it unlawful to require a franchisee to covenant not to compete with the franchisor for a period longer than three years or in an area of greater than the exclusive area granted by the franchise agreement or, in the absence of such a provision in the agreement, an area of reasonable size, upon termination of or failure to renew the franchise;
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 38–44)
What This Means (2025 FDD)
According to Boulder Designs' 2025 Franchise Disclosure Document, Item 12, concerning territory, will be amended for franchisees in Indiana. Specifically, Boulder Designs agrees that they "will not compete unfairly" with the franchisee within a reasonable area. This amendment is in accordance with the Indiana Deceptive Franchise Practices Act.
This amendment provides some protection to Boulder Designs franchisees in Indiana. It means that Boulder Designs, as the franchisor, is committing not to engage in competitive practices that would unfairly harm the franchisee's business within a reasonable geographic scope. This could include actions such as opening a competing company-owned location nearby or supporting another franchisee in a way that directly undermines the existing franchisee's market.
It is important for prospective franchisees to understand what constitutes a "reasonable area" and what specific actions would be considered "unfair competition." These terms are open to interpretation and could be subject to legal challenges. A potential franchisee should seek clarification from Boulder Designs regarding these aspects and possibly consult with a legal professional to fully understand their rights and protections under Indiana law.
Additionally, the Indiana Deceptive Franchise Practices Act addresses non-compete agreements, stating that Boulder Designs cannot enforce a covenant not to compete for longer than three years or in an area larger than the exclusive territory granted in the franchise agreement. If there is no exclusive territory defined in the agreement, the non-compete area must be of a reasonable size. This provides further clarity and protection for the franchisee regarding post-termination restrictions.