What is the duration of the non-compete agreement for Extreme Art Studio franchisees in Indiana?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
Item 17 of the FDD is amended to add the following:
Indiana Code 23-2-2.7-1(7) makes it unlawful for us to unilaterally terminate your Franchise Agreement unless there is a material violation of the Franchise Agreement and termination is not in bad faith.
Indiana Code 23-2-2.7-1(5) prohibits us to require you to agree to a prospective general release of claims subject to the Indiana Deceptive Franchise Practices Act.
The "Summary" column in Item 17.r. of the FDD is deleted and the following is inserted in its place:
No competing business for two (2) years within the Territory.
Source: Item 23 — RECEIPTS (FDD pages 49–214)
What This Means (2024 FDD)
According to the 2024 Extreme Art Studio Franchise Disclosure Document, the non-compete agreement that applies after the expiration or termination of the Franchise Agreement is modified to comply with Indiana Code. Specifically, Item 17 of the FDD is amended, and the "Summary" column in Item 17.r. is deleted and replaced with the statement that there is no competing business allowed for two years within the territory.
This means that if an Extreme Art Studio franchise in Indiana is terminated or expires, the franchisee is restricted from operating a competing business within their former territory for a period of two years. This restriction is designed to protect Extreme Art Studio's market share and confidential information.
Prospective franchisees should carefully consider the implications of this non-compete agreement, as it could limit their future business opportunities after leaving the Extreme Art Studio system. It is advisable to seek legal counsel to fully understand the scope and enforceability of the non-compete clause in Indiana.