How does Indiana Code 23-2-2.7-1(7) affect the Kidokinetics Franchise Agreement's termination clauses?

According to Kidokinetics's 2024 Franchise Disclosure Document, Indiana Code 23-2-2.7-1(7) directly impacts the termination clauses within the franchise agreement for franchises operating in Indiana. This Indiana code makes it unlawful for Kidokinetics to unilaterally terminate a franchise agreement unless there is a material violation of the agreement and the termination is not made in bad faith. This provision supersedes any conflicting terms in the standard franchise agreement, ensuring that Kidokinetics cannot terminate an Indiana franchise without demonstrating just cause, which includes a material breach of the agreement.

This protection means that Kidokinetics franchisees in Indiana have greater security against arbitrary termination. The franchisor must have a legitimate, well-documented reason for termination, rooted in a significant failure on the franchisee's part to uphold their contractual obligations. This requirement aims to prevent Kidokinetics from terminating agreements based on minor infractions or for reasons that could be seen as unfair or opportunistic.

Furthermore, any clause within the Kidokinetics Franchise Agreement that might allow for termination without good cause or in bad faith is superseded by Indiana law. This ensures that the franchisee's rights are protected under Indiana's franchise laws, providing a legal basis to challenge any termination deemed to be in violation of this code. This modification offers a significant safeguard for franchisees operating in Indiana, ensuring a fairer balance of power between the franchisor and franchisee concerning termination rights.