When is a Chesters franchisee's waiver of exemplary, punitive, or similar damages considered valid?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
Waiver of Exemplary & Punitive Damages.
RCW 19.100.190 permits franchisees to seek treble damages under certain circumstances.
Accordingly, provisions contained in the franchise agreement or elsewhere requiring franchisees to waive exemplary, punitive, or similar damages are 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).
Source: Item 23 — **RECEIPTS (FDD pages 48–197)
What This Means (2025 FDD)
According to Chesters' 2025 Franchise Disclosure Document, a franchisee's waiver of exemplary, punitive, or similar damages is generally considered void. However, there is an exception to this rule.
Specifically, such a waiver is considered valid only when it is executed as part of a negotiated settlement that occurs after the franchise agreement is already in effect. In addition to the timing, both parties, the franchisee and Chesters, must be represented by independent legal counsel during these negotiations. This requirement ensures that the franchisee's rights are protected and that the settlement is fair and informed.
This provision is based on RCW 19.100.220(2), a section of the Revised Code of Washington, which governs franchise relationships. This statute aims to protect franchisees from being forced into unfair agreements, particularly concerning the waiver of rights to seek damages in case of disputes with Chesters. Therefore, any waiver not meeting these specific conditions is unenforceable, allowing the franchisee to pursue such damages if the situation warrants it.