What is the effect of Indiana law on the Ledgers Franchise Agreement's choice of law provisions?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
Indiana Code section 23-2-2.5 and 23-2-2.7 supersedes the choice of law clauses of the Franchise Agreement.
ALL FRANCHISE AGREEMENTS EXECUTED IN AND OPERATIVE WITHIN THE STATE OF INDIANA ARE HEREBY AMENDED AS FOLLOWS:
-
- Any agreement executed in and operative within the State of Indiana shall be governed by applicable Indiana franchise laws and the right of any Franchisee to institute a civil action or initiate arbitral proceedings within the State of Indiana shall not be deemed to have been abridged in any form or manner by any provisions contained in this Agreement.
-
- The Indiana Code 23-2-2.7-1 makes it unlawful for a Franchisor to terminate a franchise without good cause or to refuse to renew a franchise on bad faith, as well as providing other protections and rights to the franchisee.
-
- In compliance with Indiana Code 12-2-2.7-1(9), any provisions in this Franchise Agreement relating to non-competition upon the termination or non-renewal of the Franchise Agreement shall be limited to a geographic area not greater than the Territory granted in this Franchise Agreement and shall be construed in accordance with Indiana Code 23-2-2.7-1(9).
-
- Indiana Code section 23-2-2.7-1(10) prohibits the choice of an exclusive forum other than Indiana.
-
- Indiana Code section 23-2-2.7-1(10) prohibits the limitation of litigation. The Indiana Secretary of State has interpreted this section to prohibit provisions in contracts regarding
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to the 2025 Ledgers Franchise Disclosure Document, Indiana law supersedes the choice of law clauses in the Ledgers Franchise Agreement. This means that for franchise agreements executed and operating within Indiana, Indiana franchise laws will govern the agreement, regardless of what the agreement itself states about which state's laws should apply.
Specifically, Indiana Code sections 23-2-2.5 and 23-2-2.7 take precedence over any conflicting choice of law provisions in the Ledgers agreement. This ensures that Ledgers franchisees in Indiana have the right to initiate civil actions or arbitral proceedings within the state, and that these rights are not limited by any terms in the Franchise Agreement.
Furthermore, Indiana law affects other aspects of the franchise relationship. For example, it restricts non-competition agreements to the franchisee's granted territory and dictates that Ledgers cannot choose an exclusive legal forum outside of Indiana. The Indiana Secretary of State also interprets the law to prohibit limitations on litigation and restrictions regarding liquidated damages. These stipulations provide additional protections and rights to Ledgers franchisees operating within Indiana.