Under what circumstances can an Alloy franchisee seek treble damages?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Waiver of Exemplary & Punitive Damages. RCW 19.100.190 permits franchisees to seek treble damages under certain circumstances.
Accordingly, provisions contained in the franchise agreement or elsewhere requiring franchisees to waive exemplary, punitive, or similar damages are void, except when executed pursuant to a negotiated settlement after the agreement is in effect and where the parties are represented by independent counsel, in accordance with RCW 19.100.220(2).
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, franchisees operating in Washington state have specific rights regarding damages. Under RCW 19.100.190, Alloy franchisees may be able to seek treble damages in certain situations. This means that a court could award three times the actual damages suffered by the franchisee. However, any provision in the franchise agreement that requires franchisees to waive exemplary, punitive, or similar damages is considered void under Washington law.
There is an exception to this rule. Alloy franchisees can only waive their right to seek such damages if the waiver is part of a negotiated settlement reached after the franchise agreement is already in effect. Additionally, both Alloy and the franchisee must be represented by independent legal counsel during these negotiations, as specified in RCW 19.100.220(2).
This protection for Alloy franchisees in Washington aims to ensure fairness in the franchisor-franchisee relationship. It prevents Alloy from using the franchise agreement to shield itself from potential misconduct that could cause significant financial harm to its franchisees, unless a fair settlement is reached with legal representation for both parties.