For Learningrx franchisees in Indiana, can a statement signed by a franchisee waive claims under state franchise law, including fraud in the inducement?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
It is unlawful for any franchise agreement between any franchisor and a franchisee who is a resident of Indiana or a non-resident who is to operate the franchise in Indiana to contain a provision that requires a franchisee not to compete with the franchisor in an area greater than the territory granted in the franchise agreement or, if no territory is granted, in an area of more than reasonable size, upon termination of a franchise agreement. (Ind. Code § 23-2-2.7-1(9)). Accordingly, Item 17 (s) of the franchise disclosure document, Section 15.1 of the Franchise Agreement and Section 11.02 of the Area Developer Agreement are amended accordingly.
Item 17 (v) of the Franchise Disclosure Document, Section 16 of the Franchise Agreement and Section 10.02 of the Area Developer Agreement are amended to omit the place where arbitration will occur.
Item 17 (x) of the Franchise Disclosure Document, Section 16 of the Franchise Agreement and Section 10.02 of the Area Developer Agreement are amended to omit any reference to selection of an out-of-Indiana choice of law.
Item 17(w) of the Franchise Disclosure Document, Sections 16 of the Franchise Agreement and Section 10.02 of the Area Developer Agreement are amended to omit any reference to selection of an out-of-Indiana forum or choice of law.
The franchise agreement requires you to sign a general release of claims as a condition of renewing or reselling the franchise. Under the law of Indiana any provision that purports to bind a person acquiring a franchise to waive compliance with the franchise laws of Indiana is void. Item 17(b)(k) of the Franchise Disclosure Document, Sections 3 and 14 of the Franchise Agreement and Section 2 and 7.02 of the Area Developer Agreement are amended to omit the requirement that an Indiana Franchisee sign a general release of claims as a condition of renewal or resale. This will not prevent Franchisor from requiring you to sign a general release of claims as part of a settlement of a dispute.
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to Learningrx's 2025 Franchise Disclosure Document, Indiana franchise law protects franchisees from unintentionally waiving their rights through signed statements or acknowledgements. Specifically, any statement signed by a Learningrx franchisee in Indiana at the start of their franchise relationship cannot waive claims under Indiana's franchise laws. This protection extends to claims of fraud in the inducement, meaning a franchisee cannot unknowingly forfeit their right to sue Learningrx for misleading them into signing the franchise agreement.
This provision ensures that Learningrx franchisees in Indiana retain their legal rights, even if they sign documents that appear to waive those rights. This addendum overrides any conflicting terms in the standard franchise agreement, providing an additional layer of protection under Indiana law. This means Learningrx franchisees in Indiana maintain the ability to pursue legal action if they believe Learningrx violated franchise laws, regardless of any initial statements they may have signed.
Furthermore, the FDD states that the franchise agreement requires franchisees to sign a general release of claims when renewing or reselling the franchise. However, under Indiana law, any provision that requires a person acquiring a franchise to waive compliance with Indiana's franchise laws is void. Therefore, Learningrx cannot require an Indiana franchisee to sign a general release of claims as a condition of renewal or resale, although Learningrx can require a release of claims as part of settling a specific dispute.