To what extent is each provision of the Indiana addendum effective for Crisp & Green?
Crisp_Green Franchise · 2024 FDDAnswer from 2024 FDD Document
Each provision of this Addendum shall be effective only to the extent, with respect to such provision, that the jurisdictional requirements of the Indiana Deceptive Franchise Practices Law are met independently without reference to this Addendum to the Disclosure Document.
ADDENDUM TO CRISP & GREEN FRANCHISING LLC FRANCHISE DISCLOSURE DOCUMENT REQUIRED BY THE STATE OF INDIANA
The Franchise Agreement and Area Development Agreement contain a covenant not to compete that extends beyond the termination of the Franchise Agreement or Area Development Agreement. These provisions may not be enforceable under Indiana law.
Indiana law makes unilateral termination of a franchise unlawful unless there is a material violation of the Franchise Agreement or Area Development Agreement and the termination is not done in bad faith.
If Indiana law requires the Franchise Agreement, Area Development Agreement, and all related documents to be governed by Indiana law, then nothing in the Franchise Agreement, Area Development Agreement, or related documents referring to Minnesota law will abrogate or reduce any of your rights as provided for under Indiana law.
Item 8, "Restrictions on Sources of Products and Services," is amended by the addition of the following language:
Any benefits derived as a result of a transaction with suppliers for Indiana franchisees will be kept by us as compensation for locating suppliers and negotiating prices for you.
Indiana law prohibits a prospective general release of claims subject to the Indiana Deceptive Franchise Practices Law.
Although the Franchise Agreement and Area Development Agreement require arbitration to be held in the office of the American Arbitration Association closest to the location of our principal executive office, arbitration held under the Franchise Agreement or Area Development Agreement must take place in Indiana if you so request. If you choose Indiana, we have the right to select the location in Indiana.
Source: Item 23 — RECEIPTS (FDD pages 66–252)
What This Means (2024 FDD)
According to the 2024 Crisp & Green Franchise Disclosure Document, the Indiana addendum's provisions are effective only if the jurisdictional requirements of the Indiana Deceptive Franchise Practices Law are independently met, without relying on the addendum itself. This means that for each specific provision within the addendum to apply to a Crisp & Green franchise in Indiana, the circumstances must already fall under the purview of Indiana's franchise law, irrespective of the addendum's existence.
Several specific stipulations are included in the Indiana addendum. The covenant not to compete extending beyond the termination of the agreement may not be enforceable under Indiana law. Indiana law makes unilateral termination unlawful unless there is a material violation and the termination is not done in bad faith. If Indiana law requires the agreements to be governed by Indiana law, then references to Minnesota law will not reduce any rights provided under Indiana law.
Furthermore, any benefits derived from transactions with suppliers for Indiana franchisees will be retained by Crisp & Green as compensation for locating suppliers and negotiating prices. Indiana law also prohibits prospective general releases of claims subject to the Indiana Deceptive Franchise Practices Law. Although the agreements require arbitration to be held at the American Arbitration Association office closest to Crisp & Green's principal executive office, arbitration must occur in Indiana if the franchisee requests it, with Crisp & Green having the right to select the location within Indiana.
This conditionality ensures that the addendum serves to clarify and adjust the franchise agreement in accordance with Indiana law, rather than attempting to override it. For a prospective Crisp & Green franchisee in Indiana, this means carefully assessing how each provision of the addendum interacts with existing Indiana franchise law to understand their rights and obligations fully. It also highlights the importance of consulting with legal counsel to determine the precise applicability and enforceability of each clause.