How might RCW 19.100.180(1) limit or supersede provisions in the Caring Transitions franchise agreement regarding the franchisor's business judgment?
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that the franchisor may exercise its discretion on the basis of its reasonable business judgment may be limited or superseded by RCW 19.100.180(1), which requires the parties to deal with each other in good faith.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, provisions in the franchise agreement that allow Caring Transitions to use its reasonable business judgment may be limited by RCW 19.100.180(1). This Washington state law requires both parties, Caring Transitions and the franchisee, to deal with each other in good faith.
In essence, while the franchise agreement might grant Caring Transitions some discretionary power based on its business judgment, this power isn't absolute for franchisees operating in Washington. The "good faith" requirement of RCW 19.100.180(1) means that Caring Transitions must act honestly and fairly in its dealings with franchisees.
This could prevent Caring Transitions from making decisions that, while perhaps justifiable under a strict business rationale, are detrimental to the franchisee and not made in good faith. A prospective franchisee should seek legal counsel to fully understand the implications of this law and how it might affect their franchise agreement with Caring Transitions.