To what specific requirements of Indiana Code are the provisions of the Management Recruiters agreement relating to the execution of releases subject?

According to Management Recruiters' 2024 Franchise Disclosure Document, the provisions of the franchise agreement relating to the execution of releases are subject to the requirements of Indiana Code Sec. 23‐2‐2.7‐1(5). This section of the Indiana Code makes it unlawful for any franchise agreement to require a franchisee who is either a resident of Indiana or a nonresident operating a franchise in Indiana to prospectively agree to a release, assignment, novation, waiver, or estoppel that relieves any person from liability imposed by this chapter. It also prohibits requiring any controversy between the franchisee and Management Recruiters to be referred to any person if the referral would be binding on the franchisee. However, this does not apply to arbitration before an independent arbitrator.

For a prospective Management Recruiters franchisee in Indiana, this means that the franchise agreement cannot force them to sign away their rights to hold Management Recruiters liable for violations of Indiana franchise law. They also cannot be compelled to accept a binding referral process for disputes, although they can agree to independent arbitration. This provision is designed to protect franchisees from unfair contract terms that might limit their legal recourse.

Furthermore, according to interpretations by the Securities Division of the Secretary of State of Indiana, this also limits Management Recruiters' right to require a general release. The Indiana Franchise Disclosure Law and the Indiana Franchise Deceptive Practices Law will prevail if there are any conflicts with South Carolina law, and Indiana franchisees must be allowed jurisdiction and venue in Indiana courts. Indiana franchisees cannot irrevocably accept the jurisdiction of South Carolina courts or any courts outside of Indiana, and any waiver of the franchisee's rights to a defense based on jurisdiction, venue, or forum non conveniens is unenforceable. Indiana franchisees must also be allowed to have arbitration proceedings held in an Indiana location.

These stipulations ensure that Management Recruiters franchisees operating in Indiana are afforded specific protections under Indiana law, preventing the franchisor from imposing terms that would force them to forfeit their legal rights or accept unfavorable dispute resolution processes. This addendum reflects Indiana's effort to balance the franchisor-franchisee relationship and protect local business owners.