How does RCW 19.100.180(1) affect the franchisor's business judgment for a Caring Transitions franchise?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Franchisor's Business Judgement.
Provisions in the franchise agreement or related agreements. stating that the franchisor may exercise its discretion on the basis of its reasonable business judgment may be limited or superseded by RCW 19.100.180(1), which requires the parties to deal with each other in good faith.
Source: Item 22 — CONTRACTS (FDD page 49)
What This Means (2025 FDD)
According to Caring Transitions's 2025 Franchise Disclosure Document, RCW 19.100.180(1) may limit or supersede provisions in the franchise agreement that allow Caring Transitions to exercise discretion based on its reasonable business judgment. This Washington statute requires both parties, Caring Transitions and the franchisee, to deal with each other in good faith.
For a prospective Caring Transitions franchisee in Washington, this means that even if the franchise agreement seems to grant Caring Transitions broad discretion in certain business decisions, that discretion is not absolute. The "good faith" requirement of RCW 19.100.180(1) acts as a check on Caring Transitions's decision-making, ensuring that they must act honestly and fairly towards the franchisee.
This statute protects franchisees from potentially unreasonable or arbitrary decisions made by Caring Transitions, even if those decisions appear to be within the franchisor's contractual rights. It ensures that Caring Transitions cannot use its business judgment to unfairly disadvantage a franchisee. Franchisees should be aware of this protection and consult with legal counsel if they believe Caring Transitions is not acting in good faith.