What is the effect of the Rider on provisions in the Fly To Fit agreement that conflict with the Indiana Acts?
Fly_To_Fit 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 44–134)
What This Means (2024 FDD)
According to Fly To Fit's 2024 Franchise Disclosure Document, the Indiana Rider modifies any provision of the Franchise Agreement that would cause it to be non-compliant with the Indiana Franchise Act and the Indiana Deceptive Franchise Practices Act.
Specifically, the Rider modifies provisions that: (1) require the franchisee to purchase goods, supplies, inventories, or services exclusively from Fly To Fit or its designated sources, if comparable quality items are available elsewhere. Note that Fly To Fit's publication of a list of approved suppliers or requiring compliance with their specifications does not constitute exclusive designation, nor does the right to disapprove a supplier; (2) allow Fly To Fit to operate a company-owned outlet engaged in a similar business within the franchisee's exclusive territory, or unfairly compete without an exclusive territory; (3) allow Fly To Fit to substantially modify the franchise agreement without the franchisee's written consent; or (4) allow Fly To Fit to obtain undisclosed benefits from the franchisee's business dealings with other parties, unless such benefits are promptly accounted for and transmitted to the franchisee.
For a prospective Fly To Fit franchisee in Indiana, this rider offers important protections by ensuring the franchise agreement adheres to Indiana law, particularly regarding sourcing, territorial exclusivity, modifications to the agreement, and financial transparency. This helps to create a fairer balance of power between the franchisee and Fly To Fit.