What is the dependency between a finding of illegality and Buns On Fire's right to terminate the agreement?
Buns_On_Fire Franchise · 2025 FDDAnswer from 2025 FDD Document
In recognition of the requirements of the Washington Franchise Investment Protection Act, Wash. Rev. Code §§ 19.100.180, the Franchise Disclosure Document for Buns on Fire, in connection with the offer and sale of franchises for use in the State of Washington shall be amended to include the following:
- Item 17, "Renewal, Termination, Transfer and Dispute Resolution," shall be amended by the addition of the following paragraphs at the conclusion of the Item:
The state of Washington has a statute, RCW 19.100.180, which may supersede the license agreement 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 license agreement in your relationship with the franchisor including the areas of termination and renewal of your license.
In any arbitration involving a franchise purchased in Washington, the arbitration site shall be either in the state of Washington, or in a place mutually agreed upon at the time of the arbitration, or as determined by the arbitrator.
In the event of a conflict of laws, the provisions of the Washington Franchise Investment Protection Act, Chapter 19.100 RCW shall prevail.
A release or waiver of rights executed by a franchisee shall not include rights under the Washington Franchise Investment Protection Act 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, 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.
Source: Item 23 — RECEIPTS (FDD pages 49–200)
What This Means (2025 FDD)
Based on the 2025 Buns On Fire Franchise Disclosure Document, the relationship between a finding of illegality and Buns On Fire's right to terminate the agreement varies by state. For instance, in Washington, the Washington Franchise Investment Protection Act (RCW 19.100.180) may supersede the franchise agreement regarding termination and renewal. Similarly, court decisions in Washington could also override the agreement in these areas. This means that Buns On Fire's termination rights could be limited or altered by Washington state law.
In Hawaii, the Franchise Investment Law requires specific disclosures and timelines before a franchise agreement is binding. The FDD states that filing in Hawaii does not constitute approval or endorsement by the Director of Commerce and Consumer Affairs. Each provision of the addendum for Hawaii is effective only to the extent that the jurisdictional requirements of the Hawaii Franchise Investment Law are met independently. This suggests that Buns On Fire must comply with Hawaii's specific franchise laws, and any termination must adhere to these regulations.
For franchisees in Rhode Island, the Rhode Island Franchise Investment Act voids any provision in a franchise agreement that restricts jurisdiction or venue to a forum outside of Rhode Island or requires the application of another state's laws. Additionally, any statement or acknowledgment signed by a franchisee cannot waive claims under Rhode Island franchise law or disclaim reliance on statements made by Buns On Fire. Similarly, in Virginia, the Virginia Retail Franchising Act prohibits Buns On Fire from using undue influence to induce a franchisee to surrender any rights under the franchise. Therefore, if a termination is based on a clause that involves undue influence, that provision may be unenforceable.
In Minnesota, Buns On Fire must comply with Minn. Stat. Sec. 80C.14, Subds. 3, 4, and 5, which generally require ninety (90) days' notice of termination (with sixty (60) days to cure) and one hundred eighty (180) days' notice of non-renewal, except in certain specified cases. Consent to transfer the franchise cannot be unreasonably withheld. These state-specific regulations highlight that Buns On Fire's ability to terminate a franchise agreement is subject to various legal limitations and requirements, which aim to protect franchisees from unfair practices and ensure compliance with local laws.