What is the maximum geographic area for non-competition clauses in the Ledgers Franchise Agreement in Indiana?
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).
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.
You will receive a geographic area within which we promise not to establish either a companyowned or franchised outlet selling the same or similar goods or services under the same or similar trademarks or service Marks. A geographic area will normally include a population of 65,000 residents and at least 3,500 business as defined by our marketing programs, as determined by the U.S. Census Bureau, or other mapping data that we feel is reliable. Schedule 1 defines your "Territory" by zip codes, political, or geographic boundaries.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to the 2025 Ledgers Franchise Disclosure Document, for franchise agreements executed and operative in Indiana, any non-competition provisions upon termination or non-renewal are limited to a geographic area no greater than the territory granted in the Franchise Agreement. The Indiana Code also specifies that a franchisee cannot be involved in a competing business for longer than one year within their exclusive franchise territory upon termination or failure to renew the agreement.
Ledgers does not grant franchisees an exclusive territory. Instead, franchisees receive a protected territory, meaning Ledgers promises not to establish a company-owned or franchised Ledgers location within that geographical area. This protected territory is defined by zip codes, political, or geographic boundaries and typically includes a population of 65,000 residents and at least 3,500 businesses.
Therefore, for a Ledgers franchise in Indiana, the non-compete area cannot exceed the franchisee's protected territory as defined in their Franchise Agreement. This means that upon termination or non-renewal, a franchisee would be restricted from operating a competing business within their previously assigned territory for a period of one year.