What is the impact 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 those fees reflect the franchisor's reasonable estimated or actual costs associated with processing the transfer.

This means that Chesters cannot charge arbitrary or inflated transfer fees. The fees 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 actual costs.

This requirement ensures transparency and fairness in the transfer process, preventing Chesters from profiting unduly from franchise transfers in Washington. Prospective franchisees should carefully review the transfer fee provisions in the franchise agreement and understand their rights under the Washington Franchise Investment Protection Act.