For Ledgers franchisees in Indiana, what is the maximum time period 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 franchisees are subject to specific non-compete restrictions. Indiana law limits the duration of non-compete agreements to a maximum of three years. However, the Ledgers franchise agreement specifies that in Indiana, upon termination of the Franchise Agreement, a franchisee cannot be involved in a competing business for one year within their exclusive Franchise Territory.
This means that if an Indiana Ledgers franchise is terminated, the franchisee is restricted from engaging in a similar business within their previously assigned territory for a period of one year. This restriction is designed to protect Ledgers' market share and brand reputation within that territory.
Prospective franchisees in Indiana should be aware of this one-year non-compete clause and understand its implications for their future business activities if they decide to leave the Ledgers franchise system. It is shorter than the standard two-year restriction mentioned elsewhere in the document, reflecting the specific legal requirements in Indiana.