For Kidokinetics franchises in Indiana, what happens if the provisions of the FDD conflict with Indiana law?
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).
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- The following provision will be added to the Franchise Agreement:
No Limitation on Litigation. Despite the foregoing provisions of this Agreement, any provision in the Agreement which limits in any manner whatsoever litigation brought for
Source: Item 23 — RECEIPT (FDD pages 59–205)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, Indiana law takes precedence over the FDD, the Franchise Agreement, and the franchisor's choice of law if there are any conflicts. This means that if a provision in any of these documents contradicts Indiana law, the Indiana law will be the governing standard.
Specifically, Indiana Code 23-2-2.7-1(7) prohibits Kidokinetics from unilaterally terminating a franchise without good cause or in bad faith. Good cause is legally defined as including any material breach of the Franchise Agreement. This Indiana law supersedes any termination clauses in the Franchise Agreement that might be inconsistent with this prohibition.
Additionally, any part of the Franchise Agreement that requires a franchisee to prospectively agree to a release, assignment, novation, waiver, or estoppel that would relieve any person from liability imposed by the Indiana Deceptive Franchise Practices Law is void if it violates that law. The covenant not to compete after the franchise agreement ends is also modified to comply with Indiana Code 23-2-2.7-1 (9). Furthermore, any provision limiting litigation for breach of the agreement is void to the extent it violates the Indiana Deceptive Franchise Practices Law.
Kidokinetics also cannot accept rebates from any person with whom the franchisee does business, except for compensation for services rendered by Kidokinetics, unless the rebate is properly accounted for and submitted to the franchisee, as stated in Indiana Code Section 23-2-2.7-1(4).