For Ledgers franchisees in Indiana, what is the maximum area restriction for a non-compete covenant after termination or failure to renew the Franchise Agreement?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
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).
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to the 2025 Ledgers Franchise Disclosure Document, Indiana law restricts the geographic scope of non-compete agreements. Specifically, for Ledgers franchisees in Indiana, any non-compete provision upon termination or non-renewal of the Franchise Agreement cannot extend beyond the territory granted in the Franchise Agreement. This means that Ledgers cannot prevent a former franchisee in Indiana from competing outside of their originally assigned territory.
This restriction is implemented to protect franchisees from overly broad non-compete clauses that could unduly limit their ability to earn a living after leaving the Ledgers system. The Indiana Code ensures that non-compete agreements are reasonable and directly tied to the franchisee's original operating area.
Prospective Ledgers franchisees in Indiana should carefully review their Franchise Agreement to understand the exact boundaries of their granted territory, as this will define the limits of the non-compete obligation. They should also be aware that Indiana law supersedes any conflicting terms in the standard Franchise Agreement, providing additional protection to franchisees operating within the state.