What does Indiana Code 23-2-2.7-1 state regarding the termination of a Ledgers franchise?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
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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.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to Ledgers' 2025 Franchise Disclosure Document, Indiana Code 23-2-2.7-1 impacts franchise agreements executed and operating within Indiana. Specifically, it makes it unlawful for Ledgers to terminate a franchise without good cause or to refuse renewal in bad faith. This statute provides additional protections and rights to the franchisee under Indiana law.
This means that Ledgers franchisees in Indiana have significant legal safeguards against arbitrary termination or non-renewal of their franchise agreements. Ledgers must demonstrate legitimate, justifiable reasons ('good cause') if they choose to terminate an agreement, and they must act in good faith when considering renewal. This provision aims to protect the franchisee's investment and business operations from unfair practices by the franchisor.
Furthermore, any non-competition clauses within the Ledgers Franchise Agreement are limited by Indiana Code 23-2-2.7-1(9) to the geographic territory granted in the franchise agreement. Indiana Code section 23-2-2.7-1(10) also prohibits the choice of an exclusive forum other than Indiana for dispute resolution. These stipulations ensure that Indiana franchisees are subject to fair and reasonable non-compete restrictions and have the right to litigate within their home state.