How is the covenant not to compete in the Kidokinetics Franchise Agreement modified to comply with Indiana Code 23-2-2.7-1(9)?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
Indiana law applies to disputes covered by Indiana franchise laws; otherwise Franchisor's Choice of Law State law applies.
Despite anything to the contrary in the Franchise Agreement, the following provisions will supersede and apply to all Franchises offered and sold in the State of Indiana:
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- The laws of the State of Indiana supersede any provisions of the FDD, the Franchise Agreement, or Franchisor's Choice of Law State law, if such provisions are in conflict with Indiana law.
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- The prohibition by Indiana Code 23-2-2.7-1(7) against unilateral termination of the Franchise without good cause or in bad faith, good cause being defined under law as including any material breach of the Franchise Agreement, will supersede the provisions of the Franchise Agreement relating to termination for cause, to the extent those provisions may be inconsistent with such prohibition.
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- Any provision in the Franchise Agreement that would require you to prospectively assent to a release, assignment, novation, waiver or estoppel which purports to relieve any person from liability imposed by the Indiana Deceptive Franchise Practices Law is void to the extent that such provision violates such law.
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- The covenant not to compete that applies after the expiration or termination of the Franchise Agreement for any reason is hereby modified to the extent necessary to comply with Indiana Code 23-2-2.7-1 (9).
Source: Item 23 — RECEIPT (FDD pages 59–205)
What This Means (2024 FDD)
According to the 2024 Kidokinetics Franchise Disclosure Document, the covenant not to compete is modified to comply with Indiana law for franchises offered and sold in Indiana. Specifically, the modification ensures compliance with Indiana Code 23-2-2.7-1(9). This code likely addresses specific restrictions or limitations on non-compete agreements within the state.
This modification means that the standard non-compete clause in the Kidokinetics Franchise Agreement is adjusted to align with Indiana's legal requirements. This could involve changes to the duration, geographic scope, or the types of activities restricted by the non-compete agreement. The Indiana addendum takes precedence over any conflicting terms in the standard franchise agreement, ensuring that the franchisee's rights are protected under Indiana law.
For a prospective Kidokinetics franchisee in Indiana, this modification is beneficial as it ensures that the non-compete agreement is fair and enforceable under Indiana law. It is important for potential franchisees to carefully review the specific modifications to the non-compete clause to understand their obligations and rights after the franchise agreement expires or is terminated. They should also seek legal counsel to fully understand the implications of the non-compete agreement in their specific circumstances.