When is it permissible for Chesters to repurchase a franchisee's business during the term of the franchise agreement?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
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 48–197)
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, specifically regarding Washington State law, there are limitations on when Chesters can repurchase a franchisee's business. Provisions that allow Chesters to repurchase a franchisee's business for any reason during the franchise term without the franchisee's consent are generally unlawful.
However, there is an exception: Chesters can repurchase the franchise if the franchise agreement is terminated for "good cause." This means that Chesters must have a legitimate and justifiable reason for terminating the agreement before repurchasing the business.
This provision is particularly important for prospective franchisees in Washington because it protects them from Chesters arbitrarily taking back their business during the franchise term. Franchisees should carefully review the franchise agreement to understand what constitutes "good cause" for termination, as this will determine the circumstances under which Chesters could repurchase their business.