What is a Carvel franchisee prohibited from doing regarding settlement of a claim without Carvel's consent?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
In addition, if litigation is not precluded by the franchise agreement, a franchisee may bring an action or proceeding arising out of or in connection with the sale of franchises, or a violation of the Washington Franchise Investment Protection Act, in Washington.
- **4.
General Release.** A release or waiver of rights in the franchise agreement or related agreements purporting to bind the franchisee to waive compliance with any provision under the Washington Franchise Investment Protection Act or any rules or orders thereunder is void except when executed pursuant to a negotiated settlement after the agreement is in effect and where the parties are represented by independent counsel, in accordance with RCW 19.100.220(2).
In addition, any such release or waiver executed in connection with a renewal or transfer of a franchise is likewise void except as provided for in RCW 19.100.220(2).
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
Based on the 2025 Carvel Franchise Disclosure Document, a Carvel franchisee operating in Washington is restricted from waiving compliance with any provision under the Washington Franchise Investment Protection Act, or any rules or orders, unless specific conditions are met. This waiver is void unless it is part of a negotiated settlement that occurs after the franchise agreement is already in effect. Additionally, both Carvel and the franchisee must be represented by independent legal counsel during these negotiations, as stipulated by RCW 19.100.220(2). This requirement ensures that franchisees are not pressured into relinquishing their rights without proper legal advice and that any settlement is genuinely in their best interest.
This protection extends to renewals or transfers of a Carvel franchise. Any release or waiver executed during a renewal or transfer is also void unless it adheres to the same conditions: a negotiated settlement after the agreement is in effect and representation by independent counsel, as detailed in RCW 19.100.220(2). This provision aims to prevent Carvel from leveraging the renewal or transfer process to force franchisees into accepting unfavorable terms or waiving their rights under the Washington Franchise Investment Protection Act.
For a prospective Carvel franchisee in Washington, this means they cannot be compelled to sign away their rights under the Washington Franchise Investment Protection Act at the outset of the agreement or during renewals/transfers, unless they have their own lawyer and the settlement is negotiated after the franchise is operational. This safeguard is designed to ensure fairness and protect franchisees from potentially overreaching actions by Carvel. Franchisees should ensure they fully understand their rights under Washington law and seek independent legal counsel when negotiating any settlements or waivers.