For Kidokinetics franchises in Indiana, what happens if the provisions of the Franchise Agreement conflict with Indiana law?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
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 Franchise Agreement if there are any conflicts for franchises offered and sold in Indiana. Specifically, the laws of Indiana will supersede any conflicting provisions in the FDD, the Franchise Agreement, or the franchisor's choice of law. This means that Kidokinetics franchisees in Indiana are protected by Indiana state laws, even if the franchise agreement states otherwise.
Indiana Code 23-2-2.7-1(7) prohibits Kidokinetics from unilaterally terminating a franchise without good cause or in bad faith, defining good cause as a 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 provision in the Franchise Agreement that requires a franchisee to prospectively waive liability imposed by the Indiana Deceptive Franchise Practices Law is void to the extent it violates that law.
The covenant not to compete, which applies after the franchise agreement expires or terminates, is modified to comply with Indiana Code 23-2-2.7-1(9). Furthermore, a provision is added to the Franchise Agreement stating that any clause limiting litigation for breach of the agreement is void if it violates the Indiana Deceptive Franchise Practices Law. These stipulations ensure that Kidokinetics's franchise operations within Indiana adhere to the state's specific legal protections for franchisees.