In Indiana, is a provision in the Caring Transitions Franchise Agreement which terminates the franchise upon the bankruptcy of the franchisee always enforceable?

According to Caring Transitions' 2025 Franchise Disclosure Document, a provision in the franchise agreement that terminates the franchise upon the franchisee's bankruptcy may not be enforceable in Indiana. This is due to potential conflicts with Title 11 of the United States Code §101, which governs bankruptcy proceedings.

This means that if a Caring Transitions franchisee in Indiana files for bankruptcy, the franchisor's ability to automatically terminate the franchise agreement based solely on that bankruptcy filing may be restricted. The franchisee's rights and protections under federal bankruptcy law could supersede the termination clause in the franchise agreement.

Prospective franchisees in Indiana should be aware of this provision and consult with legal counsel to fully understand their rights and obligations in the event of bankruptcy. It is important to note that while the termination clause may not be automatically enforceable, other aspects of the franchise agreement could still be affected by a bankruptcy filing. Franchisees should seek professional advice to navigate these complex legal issues.