What is the effect of the Washington Franchise Investment Protection Act on the Chesters franchise agreement's provisions regarding transfer fees?

According to Chesters's 2025 Franchise Disclosure Document, the Washington Franchise Investment Protection Act places a specific limitation on transfer fees. For franchisees operating in Washington, Chesters can only collect transfer fees to the extent that they reflect the company's reasonable estimated or actual costs associated with facilitating the transfer of the franchise.

This means that Chesters cannot charge an arbitrary or inflated transfer fee. The fee must be directly tied to the expenses Chesters incurs during the transfer process. This provision protects franchisees from being charged excessive fees that do not correspond to the actual costs of the transfer.

For a prospective Chesters franchisee in Washington, this is a beneficial protection. It ensures that any transfer fees charged by Chesters are justifiable and reasonable, preventing the franchisor from profiting excessively from franchise transfers. This aligns with the broader intent of the Washington Franchise Investment Protection Act, which seeks to create a fairer balance of power between franchisors and franchisees.