What happens if the Monicals Pizza Area Development Agreement is inconsistent with the terms of the addendum?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
| This Addendum to the Area Development Agreement is agreed to this day of, 20, by and between Monical Pizza Corporation and | ||||
|---|---|---|---|---|
| 1. | In recognition of the requirements of the Indiana Deceptive Franchise Practices Law, IC 23-2.2.7 and the Indiana Franchise Disclosure Law, IC 23-2-2-2.5, the Area Development Agreement for Monical Pizza Corporation is amended as follows: | |||
| | Section 8 of the Area Development Agreement is amended to prohibit unlawful unilateral termination of a franchise unless there is a material violation of the Area Development Agreement and termination is not in bad faith. | |||
| | Section 9.4 of the Area Development Agreement is amended subject to Indiana Code 23-2- 2.7-1(9) to provide that post-term non-competitor covenants shall have geographic limitation of the territory granted to Developer. | |||
| | Section 11.3 of the Area Development Agreement is amended to provide that Developer will not be required to indemnify Franchisor for any liability imposed upon Franchisor as a result of Developer's reliance upon or use of procedures or products, which were required by Franchisor, if such procedures or products were utilized by Developer in the manner required by Franchisor. | |||
| | Section 13.1 of the Area Development Agreement is amended to provide that in the event of a conflict between the laws of Indiana and Illinois, the Indiana Franchise Disclosure Law and/or the Indiana Deceptive Franchise Practices Law will prevail. | |||
| | Section 13.2 of the Area Development Agreement is amended to provide that Developer may commence litigation in Indiana for any cause of action under Indiana law. | |||
| | Section 13.7 of the Area Development Agreement is amended to provide that arbitration between Franchisor and Developer, shall be conducted in Indiana or a site mutually agreed upon. | |||
| 2. | Each provision of this Addendum shall be effective only to the extent that the jurisdictional requirements of the Indiana Law applicable to the provisions are met independently of this Addendum. To the extent this Addendum shall be deemed to be inconsistent with any terms or conditions of said Area Development Agreement or exhibits or attachments thereto, the terms of this Addendum shall govern. |
Source: Item 23 — RECEIPTS (FDD pages 46–257)
What This Means (2025 FDD)
According to the 2025 Monicals Pizza Franchise Disclosure Document, if there are inconsistencies between the Area Development Agreement and its addendum, the terms of the addendum will take precedence. This applies specifically when the addendum is designed to comply with jurisdictional requirements such as those in Hawaii, New York, Wisconsin, and Rhode Island.
This means that any modifications or clarifications made in the addendum to align with state-specific franchise laws will override the original terms of the Area Development Agreement. For a prospective Monicals Pizza area developer, this ensures that the agreement complies with local laws, providing additional protections and rights as mandated by those laws.
For example, the addendum may address issues such as non-renewal, termination, and transfer rights in accordance with Hawaii Franchise Investment Law, or restrictions on jurisdiction and venue as per the Rhode Island Franchise Investment Act. It is important for the franchisee to understand both the original agreement and the addendum to be fully aware of their rights and obligations, especially concerning regional legal compliance.
This approach is fairly common in franchising, where franchisors often use addenda to tailor agreements to specific state laws, ensuring compliance and mitigating legal risks. Franchisees should carefully review these addenda with legal counsel to fully understand their implications.