What Indiana Acts are referenced in the Pearce Bespoke Franchise Disclosure Document addendum?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
ADDENDUM TO THE FRANCHISE DISCLOSURE DOCUMENT PURSUANT TO THE INDIANA FRANCHISE DISCLOSURE LAW AND THE INDIANA DECEPTIVE FRANCHISE PRACTICES ACT
The Indiana Securities Commissioner requires that certain provisions contained in franchise documents be amended to be consistent with Indiana law, including the Indiana Franchises Act, Ind. Code Ann. §§ 1 - 51 (1994) and the Indiana Deceptive Franchise Practices Act, Ind. Code Ann. § 23-2-2.7 (1985) (collectively referred to as the "Acts"). To the extent that (a) the jurisdictional requirements of the Acts are met and (b) this Franchise Disclosure Document and Franchise Agreement contain provisions that are inconsistent with the following, such provisions are hereby amended:
- (a) To the extent the Franchise Agreement contains provisions allowing the establishment of franchisor-owned outlets that are inconsistent with the Indiana Deceptive Franchise Practices Act § 23-2-2.7(2), the requirements of this section of the Indiana Act will control.
- (b) The franchisor may not make any substantial modification of the Franchise Agreement without the franchisee's written consent.
- (c) To the extent any provision regarding renewal or termination of the Franchise Agreement is inconsistent with the Indiana Deceptive Franchise Practices Act §§ 23-2-2.7(7) and (8), the provisions of these sections of the Indiana Act will control.
- (d) Any requirement in the Franchise Agreement that requires the franchisee to prospectively assent to a release, assignment, novation, wavier or estoppel shall not relieve any person from liability arising under the Acts.
- (e) To the extent the covenants not to compete upon expiration or termination of the Franchise Agreement are inconsistent with the Indiana Deceptive Franchise Practices Act § 23-2-2.7(9), the provisions of this section of the Indiana Act will control.
- (f) To the extent that any provision of the Franchise Agreement would be deemed unenforceable pursuant to the Indiana Deceptive Franchise Practices Act § 23-2-2.7(10), as this section of the Indiana Act is interpreted and applied, such provision of the Franchise Agreement shall be so deleted therefrom.
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to Pearce Bespoke's 2025 Franchise Disclosure Document, the addendum for Indiana references two acts. These are the Indiana Franchise Disclosure Law and the Indiana Deceptive Franchise Practices Act. The addendum states that the Indiana Securities Commissioner requires certain provisions in the franchise documents to be consistent with Indiana law.
Specifically, the Indiana Franchises Act, Ind. Code Ann. §§ 1 - 51 (1994), and the Indiana Deceptive Franchise Practices Act, Ind. Code Ann. § 23-2-2.7 (1985), are mentioned. These acts are collectively referred to as "the Acts" within the addendum. Several provisions within the Pearce Bespoke Franchise Agreement are amended to align with these Indiana laws, including those related to franchisor-owned outlets, modifications to the franchise agreement, renewal or termination terms, waivers of liability, covenants not to compete, and any provisions deemed unenforceable under the Indiana Deceptive Franchise Practices Act.
For a prospective Pearce Bespoke franchisee in Indiana, this means that certain aspects of the standard franchise agreement are superseded by Indiana state law to provide additional protections. For example, the franchisor cannot make substantial modifications to the agreement without the franchisee's written consent, and certain clauses related to termination or non-renewal may be subject to stricter scrutiny under Indiana law. It is important for franchisees to understand these specific Indiana law modifications as they may impact their rights and obligations under the franchise agreement.