How might RCW 19.100.180(1) limit or supersede provisions in the 360 Painting franchise agreement regarding the franchisor's business judgment?
360_Painting Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Franchisor's Business Judgement. Provisions in the franchise agreement or related agreements stating that the franchisor may exercise its discretion on the basis of its reasonablebusinessjudgmentmay be limited orsuperseded by RCW 19.100.180(1), which requires the parties to deal with each other in good faith.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 42–46)
What This Means (2025 FDD)
According to 360 Painting's 2025 Franchise Disclosure Document, provisions within the franchise agreement that allow 360 Painting to use its business judgment may be limited or superseded by Washington state law, specifically RCW 19.100.180(1). This statute mandates that both parties, 360 Painting and the franchisee, must deal with each other in good faith.
For a prospective franchisee in Washington, this means that even if the franchise agreement grants 360 Painting discretion in certain business decisions, that discretion is not absolute. The franchisor must exercise its judgment in a way that is fair and honest, and with due regard to the franchisee's interests. This provision aims to prevent 360 Painting from making decisions that, while perhaps justifiable under a strict reading of the agreement, are detrimental to the franchisee and not made in good faith.
This protection is particularly important because franchise agreements often contain clauses that give the franchisor considerable leeway in areas such as marketing, site selection, and operational standards. RCW 19.100.180(1) serves as a check on this power, ensuring that 360 Painting cannot use its business judgment to unfairly disadvantage its franchisees. Franchisees in Washington should be aware of this protection and consult with an attorney if they believe 360 Painting is not acting in good faith.