factual

In what areas of the franchisee-franchisor relationship might RCW 19.100.180 supersede the Best Brains franchise agreement?

Best_Brains Franchise · 2025 FDD

Answer from 2025 FDD Document

  1. The Rhode Island Franchise Investment Act stipulates that you cannot release or waive any rights granted under this Act. Any provision of this franchise agreement, which constitutes a waiver of rights granted under the Act, is superseded.
    1. You agree to bring any claim against us, including our present and former employees and agents, which in any way relates to or arises out of this Agreement, or any of the dealings of the parties hereto, solely in arbitration before the American Arbitration Association.
FRANCHISEE: FRANCHISOR: Best Brains, Inc.
By: By: Hana Adas, Vice President of Operations
By: Date:

SOUTH DAKOTA ADDENDUM TO THE FRANCHISE AGREEMENT

If any of the terms of the Franchise Agreement are inconsistent with the terms below, the terms below control.

  1. The Franchise Agreement is clarified to also indicate that 50% of the initial franchise fee and 50% of royalties are deemed paid for the use of our Marks and 50% are deemed paid for our training, support, and franchise system.
State Effective Date
California Pending
Hawaii Pending
Illinois Pending
Indiana Pending
Maryland Pending
Michigan September 1, 2024
Minnesota Pending
New York Pending
North Dakota Pending
Rhode Island Pending
South Dakota Pending
Virginia Pending
Washington Pending
Wisconsin Pending

WASHINGTON ADDENDUM TO THE FRANCHISE AGREEMENT

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.

    1. 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.
    1. 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.
    1. Site of Arbitration, Mediation, and/or Litigation. In any arbitration or mediation involving a franchise purchased in Washington, the arbitration or mediation site will be either in the state of Washington, or in a place mutually agreed upon at the time of the arbitration or mediation, or as determined by the arbitrator or mediator at the time of arbitration or mediation. In addition, if litigation is not precluded by the franchise agreement, a franchisee may bring an action or proceeding arising out of or in connection with the sale of franchises, or a violation of the Washington Franchise Investment Protection Act, in Washington.
    1. General Release. A release or waiver of rights in the franchise agreement or related agreements purporting to bind the franchisee to waive compliance with any provision under the Washington Franchise Investment Protection Act or any rules or orders thereunder is 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). In addition, any such release or waiver executed in connection with a renewal or transfer of a franchise is likewise void except as provided for in RCW 19.100.220(2).

    1. Statute of Limitations and Waiver of Jury Trial. Provisions contained in the franchise agreement or related agreements that unreasonably restrict or limit the statute of limitations period for claims under the Washington Franchise Investment Protection Act, or rights or remedies under the Act such as a right to a jury trial, may not be enforceable.
    1. Transfer Fees. Transfer fees are collectable only to the extent that they reflect the franchisor's reasonable estimated or actual costs in effecting a transfer.
    1. Termination by Franchisee. The franchisee may terminate the franchise agreement under any grounds permitted under state law.
    1. Certain Buy-Back Provisions. Provisions in franchise agreements or related agreements that permit the franchisor to repurchase the franchisee's business for any reason during the term of the franchise agreement without the franchisee'

Source: Item 23 — RECEIPTS (FDD pages 42–190)

What This Means (2025 FDD)

According to Best Brains' 2025 Franchise Disclosure Document, several aspects of the franchisee-franchisor relationship may be superseded by Washington's Franchise Investment Protection Act (RCW 19.100.180) for franchisees operating in Washington. Specifically, RCW 19.100.180 may take precedence over provisions related to termination and renewal of the franchise agreement. Additionally, court decisions might also supersede the franchise agreement concerning the relationship between Best Brains and its franchisees.

Several specific clauses within the franchise agreement can be affected. Any clause allowing Best Brains to use its reasonable business judgment may be limited by RCW 19.100.180(1), which mandates that both parties act in good faith. Indemnification clauses requiring the franchisee to protect Best Brains from losses are modified, so franchisees are not obligated to cover losses caused by Best Brains' negligence, misconduct, or fraud. Furthermore, any requirement for a franchisee to reimburse Best Brains for legal costs applies only if Best Brains is the prevailing party in legal proceedings.

Noncompetition and nonsolicitation agreements also face limitations under Washington law. Noncompetition covenants are unenforceable against an employee of a Best Brains franchisee unless the employee's annualized earnings exceed $100,000 (adjusted annually for inflation). Similarly, these covenants are unenforceable against independent contractors if their earnings are below $250,000 annually (also adjusted for inflation). Best Brains is also prohibited from restricting a franchisee from soliciting or hiring employees of other Best Brains franchisees or employees of Best Brains itself.

Finally, any statements or acknowledgments signed by the franchisee at the start of the franchise relationship cannot waive claims under state franchise law, including fraud, or disclaim reliance on statements made by Best Brains. Provisions that prohibit a franchisee from communicating with regulators are unlawful under RCW 19.100.180(2)(h). These stipulations are outlined in the Washington Addendum to the Franchise Agreement, which takes precedence over conflicting terms in the standard agreement for franchises sold or operated in Washington.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.