Does the Ledgers Franchise Agreement contain provisions regarding non-competition that are different for Indiana franchisees?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
INDIANA
NOTICE TO PROSPECTIVE FRANCHISEES IN THE STATE OF INDIANA:
The following are revisions to Item 17 of the Disclosure Document:
Indiana Code section 23-27-1(9) prohibits provisions in contract which require a franchisee to agree to a covenant not to compete with the franchisor for a period longer than three (3) years or in an area greater than the exclusive area granted by the Franchise Agreement upon termination or failure to renew the Franchise Agreement. Accordingly, in the State of Indiana, upon termination of the Franchise Agreement, you cannot be involved in a competing business for one (1) year within your exclusive Franchise Territory.
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 contract regarding liquidated damages. Accordingly, the provisions in the Franchise Agreement regarding liquidated damages may not be enforceable.
Indiana Code section 23-2-2.7-1(10) prohibits the choice of an exclusive forum other than Indiana.
Indiana Code section 23-2-2.5 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:
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to Ledgers's 2025 Franchise Disclosure Document, the Franchise Agreement includes specific amendments for franchisees operating in Indiana, particularly concerning non-competition clauses. Indiana Code section 23-27-1(9) limits non-compete agreements to a maximum of three years and restricts the geographic area to the franchisee's exclusive territory. Consequently, the Ledgers Franchise Agreement specifies that in Indiana, upon termination of the agreement, franchisees cannot engage in a competing business for more than one year within their exclusive territory. This is a notable revision to Item 17 of the Disclosure Document, highlighting a more limited scope of non-competition for Indiana franchisees compared to what might be stipulated in the standard agreement.
These modifications are crucial for prospective Ledgers franchisees in Indiana as they define the extent to which their business activities are restricted post-termination. The Indiana Secretary of State interprets Indiana Code section 23-2.2.7-1(10) to prohibit contract provisions regarding liquidated damages. This means that any clauses in the Franchise Agreement related to liquidated damages may not be enforceable in Indiana.
Furthermore, Indiana law supersedes the choice of law clauses in the Franchise Agreement, ensuring that Indiana franchise laws govern agreements executed and operative within the state. This includes protections and rights afforded to franchisees under Indiana Code 23-2-2.7-1, such as the requirement of good cause for termination or renewal refusal. These stipulations provide a more favorable legal environment for Ledgers franchisees in Indiana, offering additional safeguards and limiting the enforceability of certain standard franchise agreement terms.