Can Best Brains include a provision waiving exemplary or punitive damages in the franchise agreement for Washington franchisees?
Best_Brains 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 21 — FINANCIAL STATEMENTS (FDD page 42)
What This Means (2025 FDD)
According to Best Brains' 2025 Franchise Disclosure Document, provisions requiring franchisees in Washington to waive exemplary, punitive, or similar damages are generally void. This is based on RCW 19.100.190, which permits franchisees to seek treble damages under certain circumstances.
However, there is an exception: such waivers are allowed if they are executed pursuant to a negotiated settlement after the franchise agreement is already in effect. In this case, both parties must be represented by independent counsel, as stipulated by RCW 19.100.220(2). This means that Best Brains cannot include a blanket waiver of these damages in the initial franchise agreement for Washington franchisees.
This protection ensures that franchisees retain the right to seek punitive damages under the Washington Franchise Investment Protection Act unless they knowingly and voluntarily agree to waive that right during a settlement, with the benefit of legal counsel. This is a significant protection for franchisees, preventing Best Brains from using its potentially stronger bargaining position to force a waiver of important legal rights at the outset of the franchise relationship.