Does C3 Wellness Spa have the right to modify unenforceable terms in the franchise agreement?
C3_Wellness_Spa Franchise · 2024 FDDAnswer from 2024 FDD Document
th Dakota franchisees, the statute of limitations under North Dakota Law will apply."
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- No statement, questionnaire or acknowledgement signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of: (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise.
Each provision of this amendment shall be effective only to the extent, with respect to such provision, that the jurisdictional requirements of North Dakota Law are met independently without reference to this amendment.
| Franchisor: Aryes Franchising LLC | Franchisee: | |
|---|---|---|
| Signature | Signature | |
| Name and Title (please print) | Name (please print) | |
| Dated | Dated |
WASHINGTON FRANCHISE AND DEVELOPMENT AGREEMENT AMENDMENT
Amendment to the C3 Wellness Franchise and Multi-Unit Development Agreement
In recognition of the Washington State Franchise Investment Protection Act, Chapter 19.100 RCW, the parties to the attached Aryes Franchising LLC Franchise Agreement (the "Franchise Agreement") agree as follows:
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- 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.
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- In the event of a conflict of laws, the provisions of the Washington Franchise Investment Protection Act, Chapter 19.100 RCW shall prevail.
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- 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
Source: Item 23 — RECEIPTS (FDD pages 59–293)
What This Means (2024 FDD)
According to the 2024 C3 Wellness Spa FDD, the franchise agreement in Washington State is subject to certain amendments in recognition of the Washington State Franchise Investment Protection Act, Chapter 19.100 RCW. These amendments address specific issues related to arbitration, conflict of laws, waivers of rights, transfer fees, and non-competition agreements.
Specifically, provisions in the franchise agreement that 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. Furthermore, Chapter 49.62 RCW limits the use of non-competition agreements and may supersede the franchise agreement's non-competition provisions. For example, an employee noncompete covenant is unenforceable unless the employee's annual earnings exceed $100,000, and there is a presumption that any non-compete covenant lasting longer than 18 months is unreasonable and unenforceable.
Additionally, a franchisor cannot restrict, restrain, or prohibit a franchisee from soliciting or hiring any employee of the franchisor or a franchisee of the same franchisor. Any contractual provision that requires an employee to adjudicate a non-competition covenant outside of Washington State is void and unenforceable. Also, no statement, questionnaire, or acknowledgment signed by a franchisee at the start of the franchise relationship can waive claims under any applicable state franchise law, including fraud in the inducement.