Under Indiana law, is the provision in the Fitstop Franchise Agreement requiring suits to be brought in California enforceable?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
Item 17 of the Disclosure Document is supplemented by the following:
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- The Indiana Deceptive Franchise Practices Law (Indiana Code 23-2-2.7 et seq.) in general governs the relationship between the franchisor and the franchisee by forbidding certain provisions in the Franchise Agreement and related documents and by preventing the franchisor from engaging in certain acts and practices which could be considered coercive or oppressive to the master licensee.
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- If any of the provisions of the Franchise Agreement conflict with this law, this law will control.
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- Any provisions requiring you to sign a general release of claims against us, including upon execution of the Franchise Agreement or a successor Franchise Agreement or transfer, does not release any claim you may have under the Indiana Deceptive Franchise Practices Law.
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- The Franchise Agreement provides that suit must be brought in California. These provisions may not be enforceable under Indiana law. Indiana franchise laws will govern the Franchise Agreement and any and all other related documents.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, the enforceability of the Franchise Agreement's provision mandating that lawsuits be filed in California is questionable under Indiana law. The FDD explicitly states that such provisions "may not be enforceable under Indiana law." This suggests that an Indiana franchisee might not be obligated to pursue legal action against Fitstop in California, even if the franchise agreement stipulates it. Instead, Indiana franchise laws could take precedence, allowing the franchisee to potentially litigate within Indiana.
This protection is rooted in the Indiana Deceptive Franchise Practices Law, which generally governs the relationship between Fitstop and its franchisees. This law aims to prevent franchisors from including overly coercive or oppressive terms in the franchise agreement. If any part of the Fitstop Franchise Agreement conflicts with Indiana law, the state law will prevail. This ensures that franchisees operating in Indiana are afforded the rights and protections guaranteed by Indiana's franchise regulations.
For a prospective Fitstop franchisee in Indiana, this means the clause requiring suits to be brought in California might not be strictly enforced. It is advisable to consult with a legal professional in Indiana to fully understand their rights and obligations under both the franchise agreement and Indiana state law. This is particularly important if a dispute arises with Fitstop, as the franchisee may have the option to pursue legal remedies within their own state rather than incurring the added expense and inconvenience of litigating in California.