Under what circumstances will a clause in the Gold Star Chili Franchise Agreement be modified for Indiana franchisees?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
ADDENDUM TO THE GOLD STAR CHILI FRANCHISE AGREEMENT REQUIRED BY THE STATE OF INDIANA
In recognition of the requirements of the Indiana Disclosure Law, Indiana Code §§ 23-2- 2.5-1 to 23-2-2.5-51 and the Indiana Deceptive Franchise Practices Act, Indiana Code §§ 23-2- 2.7-1 to 23-2-2.7-7, the parties to the attached Gold Star Chili, Inc. Franchise Agreement (the "Agreement") agree as follows:
-
- Section 1 of the Agreement, under the heading "Grant of Franchise," shall be supplemented by the following subsection 1.7, which shall be considered an integral part of the Agreement:
- "C. No Unfair Competition. Licensor agrees that it shall not compete unfairly with Licensee within a reasonable area surrounding the approved location of the licensed location."
-
- Section 22.1 of the Agreement shall be deleted in its entirety, and shall have no force or effect; and the following shall be substituted in lieu thereof:
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, modifications to the standard franchise agreement are required to comply with Indiana state laws. Specifically, these modifications address concerns related to unfair competition and franchise practices within the state. These changes are outlined in an addendum to the standard Gold Star Chili Franchise Agreement.
For franchisees in Indiana, Section 1 of the agreement, which covers the "Grant of Franchise," will be supplemented with subsection 1.7. This new subsection explicitly states that Gold Star agrees not to compete unfairly with the franchisee within a reasonable area surrounding the approved location. This addition aims to protect the franchisee's market area from potential encroachment by the franchisor.
Additionally, Section 22.1 of the standard agreement is entirely replaced for Indiana franchisees. While the FDD excerpt does not specify what Section 22.1 covers in the original agreement, its deletion and substitution indicate that it contains provisions that conflict with Indiana law or require modification to ensure compliance. Prospective franchisees should carefully review the full Indiana addendum to understand the exact nature of these changes and their implications for their franchise operations.