What specific rights and protections does Indiana Code 23-2-2.7-1 provide to Ledgers franchisees?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
ise 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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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 provides specific rights and protections to franchisees within the state. This code makes it unlawful for Ledgers to terminate a franchise without good cause or refuse to renew a franchise in bad faith. This offers Ledgers franchisees a degree of security against arbitrary termination or non-renewal, ensuring that such decisions are based on legitimate business reasons.
Additionally, Indiana Code 23-2-2.7-1(9) impacts non-competition agreements. Any non-compete provisions in the Ledgers Franchise Agreement that apply after termination or non-renewal are limited to the geographic territory granted in the Franchise Agreement and must align with Indiana Code 23-2-2.7-1(9). This means that Ledgers cannot impose overly broad non-compete restrictions that would unduly limit a former franchisee's ability to work in the same industry after leaving the franchise system.
Furthermore, Indiana Code section 23-2-2.7-1(10) prohibits Ledgers from requiring franchisees to litigate disputes in a forum outside of Indiana. The Indiana Secretary of State interprets this section as also prohibiting contract provisions regarding liquidated damages, which means that any clauses in the Franchise Agreement about liquidated damages may not be enforceable in Indiana. Also, any inference in the Franchise Agreement that Ledgers "is entitled" to injunctive relief will be understood to mean Ledgers "may seek" such relief. Finally, any requirement that the franchisee must execute a release upon termination of the agreement is not mandatory and is discretionary.