For Bft franchisees in Washington, what is the implication of the Rider regarding jurisdiction or venue restrictions in the franchise agreement?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
in your relationship with the franchisor including the areas of termination and renewal of your franchise. There may also be court decisions which may supersede the franchise agreement in your relationship with the franchisor including the areas of termination and renewal of your franchise.
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.
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 agreement is in effect and where the parties are represented by independent counsel. Provisions such as those which unreasonably restrict or limit the statute of limitations period for claims under the Act, or rights or remedies under the Act such as a right to a jury trial, may not be enforceable.
Transfer fees are collectable to the extent that they reflect the franchisor's reasonable estimated or actual costs in effecting a transfer.
Pursuant to RCW 49.62.020, a noncompetition covenant is void and unenforceable against an employee, including an employee of a franchisee, unless the employee's earnings from the party seeking enforcement, when annualized, exceed $100,000 per year (an amount that will be adjusted annually for inflation). In addition, a noncompetition covenant is void and unenforceable against an independent contractor of a franchisee under RCW 49.62.030 unless the independent contractor's earnings from the party seeking enforcement, when annualized, exceed $250,000 per year (an amount that will be adjusted annually for
inflation). As a result, any provisions contained in the franchise agreement or elsewhere that conflict with these limitations are void and unenforceable in Washington.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 57–66)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, a Washington franchisee has specific protections and considerations regarding dispute resolution. If litigation is not precluded by the franchise agreement, a Bft franchisee in Washington can bring legal action related to the sale of franchises or violations of the Washington Franchise Investment Protection Act within the state. This provides a local venue option for resolving disputes. Furthermore, any arbitration or mediation involving a franchise purchased in Washington must occur in Washington, or in a place mutually agreed upon, or as determined by the arbitrator or mediator. This ensures accessibility and potentially reduces costs for Washington franchisees involved in dispute resolution processes. These stipulations are outlined to protect the franchisee's rights under Washington law.
Additionally, the FDD states that a release or waiver of rights executed by a Bft franchisee cannot include rights under the Washington Franchise Investment Protection Act unless it's part of a negotiated settlement after the franchise agreement is in effect and the franchisee is represented by independent counsel. This prevents Bft from compelling franchisees to unknowingly waive their legal rights. Moreover, any provisions that unreasonably restrict or limit the statute of limitations for claims under the Act, or rights or remedies such as the right to a jury trial, may not be enforceable. This ensures that franchisees retain their fundamental legal rights under Washington law.
Moreover, the franchise agreement cannot restrict a Bft franchisee from soliciting or hiring any employee of another Bft franchisee or any employee of Bft itself. Any provisions in the franchise agreement that conflict with this are void and unenforceable in Washington. Also, non-competition covenants against an employee of a franchisee are void and unenforceable if the employee's earnings from the party seeking enforcement, when annualized, do not exceed $100,000 per year (adjusted annually for inflation). Similarly, non-competition covenants against an independent contractor of a franchisee are void and unenforceable if their earnings do not exceed $250,000 per year (adjusted annually for inflation). These regulations provide significant protections for employees and independent contractors working within the Bft franchise system in Washington.