For Kidokinetics franchises in Indiana, how is the covenant not to compete modified to comply with Indiana Code 23-2-2.7-1(9)?

According to Kidokinetics's 2024 Franchise Disclosure Document, for franchises offered and sold in Indiana, the covenant not to compete that applies after the expiration or termination of the Franchise Agreement is modified to comply with Indiana Code 23-2-2.7-1(9). This means that the standard non-compete terms outlined in the Franchise Agreement are adjusted to align with Indiana state law regarding restrictions on franchisees after they leave the Kidokinetics system.

This modification is significant for prospective Kidokinetics franchisees in Indiana because it ensures that the non-compete clause is enforceable under Indiana law. Indiana Code 23-2-2.7-1(9) likely places specific limitations on the scope, duration, or geographic area of non-compete agreements to protect franchisees from overly broad restrictions that could hinder their ability to earn a living after leaving the franchise system.

Item 17 of the FDD is also amended to include that there is no competing business allowed for two years within the Territory. This amendment provides more specific information regarding non-compete agreements for Kidokinetics franchisees in Indiana.

It is important for potential franchisees to carefully review both the standard non-compete provisions in the Franchise Agreement and the specific modifications outlined in the state addendum to fully understand their obligations and rights under Indiana law. Consulting with an attorney experienced in franchise law is advisable to ensure full comprehension of these provisions.