For Ledgers franchises in Indiana, how does the Indiana Secretary of State interpret Indiana Code section 23-2-2.7-1(10) regarding limitations of litigation?

According to Ledgers' 2025 Franchise Disclosure Document, the Indiana Secretary of State interprets Indiana Code section 23-2-2.7-1(10) to prohibit provisions in contracts regarding liquidated damages. This means that any clauses within the Ledgers Franchise Agreement that stipulate predetermined amounts to be paid as damages may not be enforceable in Indiana. This interpretation is a specific revision to Item 17 of the Disclosure Document for prospective franchisees in Indiana.

For a prospective Ledgers franchisee in Indiana, this interpretation offers a degree of protection. Liquidated damages clauses are often included in franchise agreements to protect the franchisor's interests in the event of a breach of contract by the franchisee. However, because of the Indiana Secretary of State's interpretation, Ledgers may not be able to enforce such clauses against its Indiana franchisees.

It is important for prospective franchisees to understand that while liquidated damages clauses may not be enforceable, other remedies for breach of contract may still be available to Ledgers. Franchisees should seek legal counsel to fully understand their rights and obligations under the Franchise Agreement, as well as the implications of Indiana law.