What is the geographic scope 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 geographic scope of the non-compete agreement for franchisees in Indiana is limited to their assigned territory. Specifically, the FDD states that 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."
This means that after the termination or expiration of the Franchise Agreement, an Extreme Art Studio franchisee in Indiana is restricted from operating a competing business within their designated territory for a period of two years. This restriction is designed to protect Extreme Art Studio's market share and brand recognition within that specific geographic area.
Prospective franchisees should carefully review the definition of "Territory" in their Franchise Agreement to fully understand the geographic scope of this non-compete obligation. It is also important to note that Indiana law supersedes any conflicting provisions in the FDD or Franchise Agreement, so the enforceability of the non-compete is subject to Indiana law.