Does the Fly To Fit franchise agreement allow for modifications to comply 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 the 2024 Fly To Fit Franchise Disclosure Document, the Indiana Rider to the Franchise and Multi-Unit Development Agreement includes modifications to ensure compliance with Indiana law. Specifically, the rider modifies any provision of the agreement that would require franchisees to purchase goods, supplies, inventories, or services exclusively from Fly To Fit or its designated sources, provided comparable quality items are available elsewhere. This modification ensures the agreement aligns with the Indiana Franchise Act and the Indiana Deceptive Franchise Practices Act, collectively referred to as the "Indiana Acts."
Furthermore, the rider addresses other potential conflicts with the Indiana Acts. It modifies provisions that would allow Fly To Fit to establish a company-owned outlet engaged in a substantially identical business within the franchisee's exclusive territory or permit Fly To Fit to compete unfairly with the franchisee in a reasonable area if no exclusive territory is designated. The rider also prevents Fly To Fit from substantially modifying the franchise agreement without the franchisee's written consent and prohibits Fly To Fit from obtaining undisclosed benefits from the franchisee's business transactions.
In practical terms, this means that a Fly To Fit franchisee in Indiana will have certain protections under the state's franchise laws, ensuring a fairer business relationship. For example, Fly To Fit cannot force the franchisee to buy supplies only from them if the franchisee can find comparable supplies elsewhere. Also, Fly To Fit cannot unfairly compete with its own franchisees or change the franchise agreement without the franchisee's consent. These modifications provide a level of security and fairness for franchisees operating in Indiana, aligning the franchise agreement with state regulations designed to protect franchisees.