Under what conditions can a Bft franchisee bring an action in Washington if litigation is not precluded by the franchise agreement?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
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 franchisee may bring an action or proceeding in Washington under specific conditions if litigation is not precluded by the franchise agreement. This applies when the action arises from or is connected to the sale of franchises or involves a violation of the Washington Franchise Investment Protection Act. This provision ensures that franchisees operating in Washington have a legal avenue within the state for specific franchise-related disputes.
This condition is significant for prospective Bft franchisees in Washington because it clarifies their legal rights and options. It means that if a dispute arises related to the sale of the franchise or a violation of the Washington Franchise Investment Protection Act, the franchisee can pursue legal action in Washington courts, provided the franchise agreement does not explicitly prohibit litigation. This offers a degree of protection and accessibility to the legal system within their state of operation.
It is important for potential Bft franchisees to understand the implications of this clause in conjunction with the entire franchise agreement. While this provision allows for certain legal actions in Washington, the franchise agreement might contain other clauses that could affect the scope or process of such litigation. Franchisees should seek legal counsel to fully understand their rights and obligations under the agreement, especially concerning dispute resolution and potential litigation.