For Kidokinetics franchises in Indiana, what law supersedes provisions of the FDD, the Franchise Agreement, or the Franchisor's Choice of Law State law if there is a conflict?
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:
-
- 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.
-
- 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.
-
- 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.
-
- 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).
-
- 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, for franchises offered and sold in Indiana, the laws of the State of Indiana will take precedence over any conflicting provisions in the FDD, the Franchise Agreement, or the Franchisor's Choice of Law State law. This means that if any part of the franchise agreement or related documents clashes with Indiana law, Indiana law will be the governing authority. This ensures that Kidokinetics franchisees in Indiana are protected by Indiana's specific franchise laws.
This also means that certain provisions in the Franchise Agreement are superseded by Indiana law. For example, Indiana law prohibits unilateral termination of the franchise without good cause or in bad faith, which supersedes any conflicting termination clauses in the Franchise Agreement. Additionally, any agreement requiring the franchisee to release the franchisor from liabilities 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 must also comply with Indiana Code 23-2-2.7-1(9).
Furthermore, any clause in the Franchise Agreement that unduly limits litigation for breach of the agreement is void to the extent it violates the Indiana Deceptive Franchise Practices Law. These stipulations are included in the FDD as a condition of registration in Indiana, although Kidokinetics states that it intends to fully enforce all provisions of the Franchise Agreement to the fullest extent possible, including choice-of-law and dispute resolution provisions, and to rely on federal pre-emption under the Federal Arbitration Act.