For Ledgers franchises in Indiana, what specific Indiana franchise laws govern agreements executed and operative within the state?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
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:
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- Any agreement executed in and operative within the State of Indiana shall be governed by applicable Indiana franchise laws and the right of any Franchisee to institute a civil action or initiate arbitral proceedings within the State of Indiana shall not be deemed to have been abridged in any form or manner by any provisions contained in this Agreement.
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- The Indiana Code 23-2-2.7-1 makes it unlawful for a Franchisor to terminate a franchise without good cause or to refuse to renew a franchise on bad faith, as well as providing other protections and rights to the franchisee.
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- 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).
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- Indiana Code section 23-2-2.7-1(10) prohibits the choice of an exclusive forum other than Indiana.
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- 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 contracts regarding
- liquidated damages. Accordingly, any provisions in the Franchise Agreement regarding liquidated damages may not be enforceable.
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- In compliance with Indiana Code 23-2-2.7-1(10), any inference contained in the Franchise Agreement to the effect that the Franchisor "is entitled" to injunctive relief shall, when applicable to a Franchise Agreement executed in and operative within the State of Indiana, is hereby deleted, understood to mean and replace the words "may seek."
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- Indiana Code section 23-2-2.5 and 23-2-2.7 supersedes the choice of law clauses of the Franchise Agreement.
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- In compliance with Indiana Code 23-2-2.7-1(5), any requirement that the Franchisee must execute a release upon termination of this Agreement shall not be mandatory and is hereby made discretionary. However, Franchisee shall execute all other documents necessary to fully rescind all agreements between the parties under this Agreement.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to the 2025 Ledgers Franchise Disclosure Document, several Indiana franchise laws govern agreements executed and operative within the state. Indiana Code sections 23-2-2.5 and 23-2-2.7 supersede any choice of law clauses in the franchise agreement. This means that regardless of what the franchise agreement might say about which state's laws apply, Indiana law will take precedence for agreements within Indiana.
Specifically, Indiana Code 23-2-2.7-1 makes it illegal for Ledgers to terminate a franchise without good cause or refuse renewal in bad faith, providing franchisees with certain protections and rights. Any non-competition provisions in the franchise agreement that apply after termination or non-renewal are limited to the geographic territory granted in the agreement, as per Indiana Code 23-2-2.7-1(9).
Furthermore, Indiana Code section 23-2-2.7-1(10) prohibits requiring an exclusive forum outside of Indiana for resolving disputes and also prohibits limiting litigation. Any inference in the Franchise Agreement that Ledgers is "entitled" to injunctive relief is understood to mean Ledgers "may seek" such relief. Finally, any requirement that a franchisee must execute a release upon termination of the agreement is not mandatory but discretionary, according to Indiana Code 23-2-2.7-1(5); however, the franchisee must execute all other documents necessary to fully rescind all agreements between the parties.