What constitutes 'good cause' for Alloy to terminate a franchise in Washington?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
The provisions of this Addendum form an integral part of, are incorporated into, and modify the Franchise Disclosure Document, the franchise agreement, and all related agreements regardless of anything to the contrary contained therein. This Addendum applies if: (a) the offer to sell a franchise is accepted in Washington; (b) the purchaser of the franchise is a resident of Washington; and/or (c) the franchised business that is the subject of the sale is to be located or operated, wholly or partly, in Washington.
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- Conflict of Laws. In the event of a conflict of laws, the provisions of the Washington Franchise Investment Protection Act, chapter 19.100 RCW will prevail.
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- Franchisee Bill of Rights. RCW 19.100.180 may supersede provisions in the franchise agreement or related agreements concerning your relationship with the franchisor, including in the areas of termination and renewal of your franchise.
There may also be court decisions that supersede the franchise agreement or related agreements concerning your relationship with the franchisor.
Franchise agreement provisions, including those summarized in Item 17 of the Franchise Disclosure Document, are subject to state law.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
The 2025 Alloy Franchise Disclosure Document includes a Washington state addendum that addresses franchise termination. Specifically, RCW 19.100.180, the Franchisee Bill of Rights within the Washington Franchise Investment Protection Act, may supersede provisions in the franchise agreement concerning termination. This means that the rights and protections afforded to franchisees under Washington law will take precedence over any conflicting terms in the franchise agreement itself.
In practical terms, this means that while the Alloy franchise agreement likely outlines specific causes for termination (as summarized in Item 17 of the FDD), those causes must align with what Washington law considers legitimate. If the franchise agreement allows Alloy to terminate the franchise for reasons not recognized as 'good cause' under Washington's Franchise Investment Protection Act, that particular provision of the agreement may not be enforceable.
Therefore, a prospective Alloy franchisee in Washington should carefully review both the franchise agreement and the Washington Franchise Investment Protection Act to understand their termination rights and the definition of 'good cause' in that jurisdiction. They should also seek legal counsel to ensure full comprehension of their rights under Washington law, as court decisions may further clarify or supersede the franchise agreement's terms regarding termination.