For Ledgers franchisees in Indiana, what is the maximum area a franchisee cannot be involved in a competing business?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to Ledgers' 2025 Franchise Disclosure Document, Indiana law affects the non-compete provisions within the franchise agreement. Specifically, Indiana Code section 23-27-1(9) limits the scope of non-compete agreements that Ledgers can enforce in the state.
Upon termination of the Ledgers Franchise Agreement in Indiana, a franchisee cannot be involved in a competing business for more than one year. Furthermore, the restricted area where the franchisee cannot compete is limited to the franchisee's exclusive Franchise Territory. This means that the geographic scope of the non-compete is tied directly to the territory granted to the franchisee under the Franchise Agreement.
This modification is important for prospective Ledgers franchisees in Indiana as it defines the boundaries of their business activities should they decide to leave the franchise system. The one-year restriction and the limitation to the exclusive territory provide a clearer understanding of their obligations and potential opportunities after the franchise agreement ends. This is more favorable than non-compete clauses that might extend for longer periods or cover broader geographic areas, which are common in other franchise systems.