What happens if the Desi District franchise agreement conflicts with the Indiana Acts?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
- **1.
Definitions.** Capitalized terms used but not defined in this Rider have the meanings given in the Agreement.
The "Indiana Acts" means the Indiana Franchise Act and the Indiana Deceptive Franchise Practices Act.
- **2.
Certain Provisions Modified.** Any provision of the Agreement which would have any of the following effects is hereby modified to the extent required for the Agreement to be in compliance with the Indiana Acts:
- (1) Requiring goods, supplies, inventories, or services to be purchased exclusively from the franchisor or sources designated by the franchisor where such goods, supplies, inventories, or services of comparable quality are available from sources other than those designated by the franchisor.
However, the publication by the franchisor of a list of approved suppliers of goods, supplies, inventories, or services or the requirement that such goods, supplies, inventories, or services comply with specifications and standards prescribed by the franchisor does not constitute designation of a source nor does a reasonable right of the franchisor to disapprove a supplier constitute a designation.
This subdivision does not apply to the principal goods, supplies, inventories, or services manufactured or trademarked by the franchisor.
(2) Allowing the franchisor to establish a franchisor-owned outlet engaged in a substantially identical business to that of the franchisee within the exclusive territory granted the franchisee by the franchise agreement; or, if no exclusive territory is designated, permitting the franchisor to compete unfairly with the franchisee within a reasonable area.
(3) Allowing substantial modification of the franchise agreement by the franchisor without the consent in writing of the franchisee.
(4) Allowing the franchisor to obtain money, goods, services, or any other benefit from any other person with whom the franchisee does business, on account of, or in relation to, the transaction between the franchisee and the other person, other than for compensation for services rendered by the franchisor, unless the benefit is promptly accounted for, and transmitted to the franchisee.
Source: Item 23 — RECEIPTS (FDD pages 52–140)
What This Means (2024 FDD)
According to the 2024 Desi District Franchise Disclosure Document, the franchise agreement is modified to comply with the Indiana Acts if any provision would have certain effects. The "Indiana Acts" are defined as the Indiana Franchise Act and the Indiana Deceptive Franchise Practices Act.
Specifically, the agreement is modified to the extent required for compliance with the Indiana Acts if it includes provisions that: require exclusive purchasing from the franchisor when comparable goods are available elsewhere (except for trademarked items); allow franchisor-owned outlets within the franchisee's exclusive territory or unfair competition without an exclusive territory; permit substantial modification of the agreement by Desi District without the franchisee's written consent; or allow Desi District to obtain undisclosed benefits from the franchisee's business dealings.
However, the modification regarding exclusive purchasing does not prevent Desi District from publishing a list of approved suppliers or requiring goods to meet certain specifications. Also, the modification does not apply to the principal goods, supplies, inventories, or services manufactured or trademarked by Desi District.