Under what circumstances related to settlements and legal representation can a release or waiver of rights executed by a Carls developer include rights under the Washington Franchise Investment Protection Act?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
- 1. The provisions of this Addendum form an integral part of, and are incorporated into, the Development Agreement. This Addendum is being executed because: (A) the offer or sale of a franchise to Developer was made in the State of Washington; (B) Developer is a resident of the State of Washington; and/or (C) part or all of the Development Territory is located in the State of Washington.
- 2. The state of Washington has a statute, the Washington Franchise Investment Protection Act, RCW 19.100.180 ("Act"), which may supersede this Agreement in your relationship with CJR including the areas of termination and renewal of your franchise. There also may be court decisions which may supersede this Agreement in your relationship with CJR including the areas of termination and renewal of your franchise.
- 3. In the event of a conflict of laws, the provisions of the Act shall prevail.
- 4. A release or waiver of rights executed by Developer shall not include rights under the 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.
- 5. Transfer fees are collectable to the extent that they reflect CJR's reasonable estimated or actual costs in effecting a transfer.
- 6. Any capitalized terms that are not defined in this Addendum shall have the meaning given them in the Development Agreement.
- 7. The provisions of this Addendum will be effective only to the extent that the jurisdictional requirements of the Act are met independently of this Addendum.
- 8. Except as expressly modified by this Addendum, the Development Agreement remains unmodified and in full force and effect.
Source: Item 23 — RECEIPTS (FDD pages 80–480)
What This Means (2024 FDD)
According to the 2024 Carls FDD, a release or waiver of rights executed by a Carls developer in Washington State cannot include rights under the Washington Franchise Investment Protection Act (the "Act"), except under specific circumstances. This protection is afforded to developers due to the Washington Franchise Investment Protection Act, RCW 19.100.180, which may supersede the franchise agreement, particularly in areas of termination and renewal.
Specifically, Carls's FDD stipulates that a developer's release or waiver can only include rights under the Act if it is executed pursuant to a negotiated settlement after the development agreement is already in effect. Furthermore, at the time of settlement, the developer must be represented by independent legal counsel. This requirement ensures that the developer has proper guidance and representation when making decisions that could affect their rights under the Washington Franchise Investment Protection Act.
This provision aims to protect Carls developers in Washington from unknowingly or unfairly relinquishing their rights under the state's franchise laws. It ensures that any waiver of these rights is made knowingly, voluntarily, and with the benefit of independent legal advice, typically in the context of resolving a dispute after the franchise relationship has commenced. This is a critical protection for franchisees, as it prevents franchisors from using overreaching release agreements to circumvent state franchise laws.