For the Exit franchise, which states mentioned in this section address the issue of injunctive relief and bond requirements?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
- (C) INDIANA.
If this Agreement is governed by the laws of the State of Indiana, then: (1) the geographical limitation contained in Section 21 will be limited to within the Protected Territory; (2) Section 21 which states Subfranchisor is entitled to injunctive relief may be inapplicable; rather, Subfranchisor is entitled to seek injunctive relief; (3) notwithstanding any provisions of this Agreement to the contrary, a court of competent jurisdiction will determine (a) whether damages alone can adequately compensate Subfranchisor if there is a violation by Franchisee, Franchisee's shareholders or the partners or members, as the case may be, and (b) whether Subfranchisor will be required to post a bond or other security, and the amount of such bond or other security, in any injunctive proceeding commenced by Subfranchisor against Franchisee, Franchisee's shareholders or the partners or members, as the case may be.
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, Indiana is the only state mentioned that addresses the issue of injunctive relief and bond requirements in the franchise agreement. Specifically, the FDD states that if the franchise agreement is governed by Indiana law, the section of the agreement that says the subfranchisor is entitled to injunctive relief may not apply. Instead, the subfranchisor is entitled to seek injunctive relief.
Furthermore, in Indiana, a court will determine whether damages alone can adequately compensate the subfranchisor if the franchisee violates the agreement. The court will also decide if the subfranchisor needs to post a bond or other security to obtain an injunction against the franchisee, and if so, how much that bond or security should be.
This means that if an Exit franchisee is operating in Indiana, the franchisor's ability to obtain an immediate injunction may be subject to court review, and the franchisor might be required to post a bond, which is not the standard practice. This could potentially delay or complicate the process of enforcing the non-compete and protecting the Exit System in Indiana compared to other states.