For Auntie Annes franchises sold in Washington, what happens if there are inconsistencies between the Franchise Disclosure Document or Franchise Agreement and the Washington Franchise Investment Protection Act?
Auntie_Annes Franchise · 2024 FDDAnswer from 2024 FDD Document
In recognition of the requirements of the Washington Franchise Investment Protection Act, Wash. Rev. Code §§ 19.100.010 through 19.100.940, the Franchise Agreement, for franchises offered and sold in the State of Washington, is amended to include the following:
1. If any of the provisions in the franchise Disclosure Document or the Franchise Agreement, are inconsistent with the relationship provisions of RCW 19.100.180 or other requirements of the Washington Franchise Investment Protection Act, the provisions of the Act will prevail over the inconsistent provisions with regard to any franchise sold in Washington.
2. In any arbitration involving a franchise purchased in Washington, the arbitration site will be either in Washington or in a place as mutually agreed on at the time of the arbitration, or as determined by the arbitrator.
3. A release or waiver of rights you sign will not include rights under the Act except when executed pursuant to a negotiated settlement after the Franchise Agreement is in effect and where the parties are represented by independent counsel.
Provisions such as those that unreasonably restrict or limit the statute of limitations period for claims under the Act, and rights or remedies under the Act such as a right to a jury trial, may not be enforceable.
- 4. The State of Washington has a statute, RCW 19.100.180 that may supersede the Franchise Agreement in your relationship with us including the areas of termination and renewal of your franchise.
There also may be court decisions that may supersede the Franchise Agreement in your relationship with us including the areas of termination and renewal of your franchise.
5. On a conflict of laws, the provisions of the Washington Franchise Investment Protection Act, Chapter 19.100 RCW will prevail.
6. Transfer fees are collectable to the extent that they reflect our reasonable estimated or actual costs in effecting a transfer.
7. Chapter 49.62 RCW limits the use of noncompetition agreements and may supersede the Agreement's noncompetition provisions.
Source: Item 22 — CONTRACTS (FDD page 106)
What This Means (2024 FDD)
According to Auntie Annes's 2024 Franchise Disclosure Document, the Washington Addendum to both the Disclosure Document and the Franchise Agreement addresses inconsistencies with the Washington Franchise Investment Protection Act. Specifically, if any provisions within either document are inconsistent with the relationship provisions outlined in RCW 19.100.180 or other requirements of the Act, the provisions of the Act will take precedence. This ensures that the franchisee's rights and protections under Washington law are upheld, regardless of what the franchise agreement might state.
This means that prospective Auntie Annes franchisees in Washington are subject to the Washington Franchise Investment Protection Act. This Act may provide more favorable terms or greater protections than the standard franchise agreement. For example, the addendum explicitly states that the Washington statute, RCW 19.100.180, may supersede the Franchise Agreement, particularly in areas of termination and renewal. Court decisions may also supersede the Franchise Agreement in these areas.
Furthermore, the addendum clarifies that certain provisions that might limit a franchisee's rights under the Act may not be enforceable. This includes restrictions on the statute of limitations for claims, rights to a jury trial, and the use of noncompetition agreements, which are limited by Chapter 49.62 RCW. The arbitration site for any disputes must be in Washington or a mutually agreed-upon location, or as determined by the arbitrator, ensuring a more accessible venue for Washington franchisees.
Finally, any release or waiver of rights signed by the franchisee will not include rights under the Act unless it is part of a negotiated settlement after the Franchise Agreement is in effect and both parties are represented by independent counsel. This provision aims to prevent franchisees from unknowingly waiving their rights under the Washington Franchise Investment Protection Act during the initial signing of the agreement.