Is engaging in deceptive trade practices by a Buns On Fire franchisee grounds for termination?
Buns_On_Fire Franchise · 2025 FDDAnswer from 2025 FDD Document
The Indiana Deceptive Franchise Practices Act requires that Indiana law govern any cause of action which arises under the Indiana Franchise Disclosure Law or the Indiana Deceptive Franchise Practices Act.
-
- No release language set forth in the Disclosure Document or the Franchise Agreement shall relieve us or any other person directly or indirectly form liability imposed by the laws concerning franchising of the State of Indiana.
-
- Each provision of this Addendum to the Disclosure Document shall be effective only to the extent, with respect to such provision, that the jurisdictional requirements of the Indiana Franchise Disclosure Law, Indiana Code §§ 23-2-2.5-1 to 23-2-2.5-51, and the Indiana Deceptive Franchise Practices Act, Indiana Code §§ 23-2-2.7-1 to 23-2-2.7-10, are met independently without reference to this Addendum to the Disclosure Document.
ADDENDUM TO FRANCHISE DISCLOSURE DOCUMENT FOR THE STATE OF MARYLAND
The Franchise Disclosure Document for Buns on Fire, for use in the State of Maryland shall be amended as follows:
- Item 17, "Renewal, Termination, Transfer and Dispute Resolution," shall be amended by the addition of the following language:
The general releases required for renewal or transfer will not apply with respect to any claim you may have which arises under the Maryland Franchise Registration and Disclosure Law.
You may bring a lawsuit in Maryland with respect to claims arising under the Maryland Franchise Registration and Disclosure Law.
Any claims arising under the Maryland Franchise Registration and Disclosure Law must be brought within 3 years after the grant of the franchise.
The Franchisee may sue in Maryland for claims arising under the Maryland Franchise Registration and Disclosure Law.
Source: Item 23 — RECEIPTS (FDD pages 49–200)
What This Means (2025 FDD)
The 2025 Buns On Fire Franchise Disclosure Document includes addenda for several states that address deceptive practices and their legal ramifications, but it does not explicitly state that engaging in deceptive trade practices is grounds for termination of the franchise agreement. For example, the addendum for Indiana references the Indiana Deceptive Franchise Practices Act and stipulates that Indiana law governs any cause of action arising under it. Similarly, the addendum for Maryland states that releases required for renewal or transfer will not apply to claims arising under the Maryland Franchise Registration and Disclosure Law. These addenda primarily focus on protecting the franchisee's rights under state laws related to franchising and deceptive practices.
While the FDD does not directly state that deceptive trade practices are grounds for termination, it does outline Buns On Fire's rights regarding the use of its trademarks and systems. Franchisees must use only designated marks and conduct business accordingly. Buns On Fire retains the right to inspect the franchisee's business, financial books, records, and operations to ensure proper use of these marks.
Furthermore, the FDD includes covenants not to compete, both during and after the term of the agreement. Post-termination, a franchisee is restricted from engaging in a competitive business within a defined territory for a period of two years. Violation of these covenants can lead to injunctive relief, as Buns On Fire is entitled to seek injunctions against conduct violating these terms.
Therefore, while the document does not explicitly list deceptive trade practices as a cause for termination, a prospective franchisee should inquire with Buns On Fire about specific instances of deceptive practices that could lead to termination, and how those actions might violate the terms and conditions of the franchise agreement, particularly concerning trademark usage, operational standards, and adherence to legal and ethical business practices.