Under what condition is it unlawful for Carvel to repurchase a franchisee's business during the term of the franchise agreement without the franchisee's consent?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
- **8.
Certain Buy-Back Provisions.** Provisions in franchise agreements or related agreements that permit the franchisor to repurchase the franchisee's business for any reason during the term of the franchise agreement without the franchisee's consent are unlawful pursuant to RCW 19.100.180(2)(j), unless the franchise is terminated for good cause.
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, specifically the New York Addendum, certain buy-back provisions within the franchise agreement are deemed unlawful under specific conditions, particularly concerning franchisees in Washington state.
Specifically, provisions that allow Carvel to repurchase a franchisee's business during the franchise term without the franchisee's consent are unlawful, unless the franchise is terminated for good cause. This is in accordance with RCW 19.100.180(2)(j), a statute within the Washington Franchise Investment Protection Act.
This provision protects Carvel franchisees by ensuring they cannot be forced to sell their business back to Carvel during the term of the agreement unless there is a justifiable reason for termination. This clause aims to prevent Carvel from arbitrarily reclaiming successful franchises without due cause, providing a level of security for the franchisee's investment and operation.