Does the Best Western agreement create a franchise relationship between the parties?
Best_Western Franchise · 2025 FDDAnswer from 2025 FDD Document
In recognition of the requirements by the Washington Franchise Investment Protection Act and the Rules and Regulations promulgated thereunder (the "Act"), the Regulatory Documents of Best Western International, Inc. shall be modified as follows:
In the event of a conflict of laws, the provisions of the Washington Franchise Investment Protection Act, Chapter 19.100 RCW will prevail.
RCW 19.100.180 may supersede this Agreement in Member's relationship with Best Western including the areas of termination and renewal of your license. There may also be court decisions which may supersede this Agreement in Member's relationship with Best Western including the areas of termination and renewal of Member's license.
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 Agreement, a Member may bring an action or proceeding arising out of or in connection with the sale of licenses, or a violation of the Washington Franchise Investment Protection Act, in Washington.
A release or waiver of rights executed by a franchisee may not include rights under the Washington Franchise Investment Protection Act or any rule or order thereunder except when executed pursuant to a negotiated settlement after the
Source: Item 23 — Receipts (FDD pages 108–413)
What This Means (2025 FDD)
Based on the 2025 Best Western Franchise Disclosure Document, the relationship between Best Western and its members is governed by a Membership Agreement. Item 23 includes multiple references to state franchise laws, implying that the Best Western agreement is generally considered a franchise relationship, but the exact nature of the relationship can be superseded by state laws.
The FDD includes riders to the agreement that address specific state franchise laws, such as those in Washington, Minnesota, North Dakota, Illinois, Maryland, and New York. These riders modify the standard Membership Agreement to ensure compliance with local regulations regarding termination, waivers, governing law, and other aspects of the franchise relationship. For example, the Washington Franchise Investment Protection Act may supersede the agreement in areas of termination and renewal.
Several clauses, such as those concerning "No Waiver of Disclaimer of Reliance," are included to prevent franchisees from waiving rights granted under state franchise laws. These clauses ensure that franchisees retain their legal protections, including the right to bring claims of fraud. The inclusion of these state-specific provisions and protections suggests that Best Western acknowledges and operates within a franchise relationship framework, subject to the specific laws of each state where it operates.
Prospective franchisees should carefully review the rider applicable to their state and consult with legal counsel to understand how these provisions affect their rights and obligations under the Best Western Membership Agreement. The interplay between the standard agreement and state-specific riders is crucial for understanding the full scope of the franchise relationship.