§ 23-2-2.7-2 — Franchise agreement; unlawful acts and practices

Indiana § 23-2-2.7-2

• Jurisdiction: Indiana
• Title 23: BUSINESS AND OTHER ASSOCIATIONS
• Art. 2: SECURITIES AND FRANCHISES
• Ch. 2.7: Deceptive Franchise Practices

Text

It is unlawful for any franchisor who has
entered into any franchise agreement with a franchisee who is either a
resident of Indiana or a nonresident operating a franchise in Indiana to
engage in any of the following acts and practices in relation to the
agreement:
(1) Coercing the franchisee to:
(i) order or accept delivery of any goods, supplies, inventories,
or services which are neither necessary to the operation of the
franchise, required by the franchise agreement, required by law,
nor voluntarily ordered by the franchisee;
(ii) order or accept delivery of any goods offered for sale by the
franchisee which includes modifications or accessories which
are not included in the base price of those goods as publicly
advertised by the franchisor;
(iii) participate in an advertising campaign or contest, any
promotional campaign, promotional materials, display
decorations, or materials at an expense to the franchisee over
and above the maximum percentage of gross monthly sales or
the maximum absolute sum required to be spent by the
franchisee provided for in the franchise agreement; in the
absence of such provision for required advertising expenditures
in the franchise agreement, no such participation may be
required; or
(iv) enter into any agreement with the franchisor or any
designee of the franchisor, or do any other act prejudicial to the
franchisee, by threatening to cancel or fail to renew any
agreement between the franchisee and the franchisor. Notice in
good faith to any franchisee of the franchisee's violation of the
terms or provisions of a franchise or agreement does not
constitute a violation of this subdivision.
(2) Refusing or failing to deliver in reasonable quantities and
within a reasonable time after receipt of an order from a
franchisee for any goods, supplies, inventories, or services which
the franchisor has agreed to supply to the franchisee, unless the
failure is caused by acts or causes beyond the control of the
franchisor.
(3) Denying the surviving spouse, heirs, or estate of a deceased
franchisee the opportunity to participate in the ownership of the
franchise under a valid franchise agreement for a reasonable time
after the death of the franchisee, provided that the surviving
spouse, heirs, or estate maintains all standards and obligations of
the franchise.
(4) Establishing a franchisor-owned outlet engaged in a
substantially identical business to that of the franchisee within the
exclusive territory granted the franchisee by the franchise
agreement or, if no exclusive territory is designated, competing
unfairly with the franchisee within a reasonable area. However,
a franchisor shall not be considered to be competing when
operating a business either temporarily for a reasonable period of
time, or in a bona fide retail operation which is for sale to any
qualified independent person at a fair and reasonable price, or in
a bona fide relationship in which an independent person has made
a significant investment subject to loss in the business operation
and can reasonably expect to acquire full ownership of such
business on reasonable terms and conditions.
(5) Discriminating unfairly among its franchisees or unreasonably
failing or refusing to comply with any terms of a franchise
agreement.
(6) Obtaining money, goods, services, or any other benefit from
any other person with whom the franchisee does business, on
account of, or in relation to, the transaction between the
franchisee and the other person, other than compensation for
services rendered by the franchisor, unless the benefit is promptly
accounted for, and transmitted to the franchisee.
(7) Increasing prices of goods provided by the franchisor which
the franchisee had ordered for retail consumers prior to the
franchisee's receipt of a written official price increase notification.
Price increases caused by conformity to a state or federal law, the
revaluation of the United States dollar in the case of foreign-made
goods or pursuant to the franchise agreement are not subject to
this subdivision.
(8) Using deceptive advertising or engaging in deceptive acts in
connection with the franchise or the franchisor's business.
As added by Acts 1976, P.L.116, SEC.1. Amended by
P.L.233-1985, SEC.6.