What does RCW 19.100.180(1) require of Chesters and its franchisees?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Franchisor's Business Judgement. Provisions in the franchise agreement or related agreements stating that the franchisor may exercise its discretion on the basis of its reasonable business judgment may be limited or superseded by RCW 19.100.180(1), which requires the parties to deal with each other in good faith.
Source: Item 23 — **RECEIPTS (FDD pages 48–197)
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, RCW 19.100.180(1) requires that Chesters and its franchisees deal with each other in good faith. This Washington state law may limit or supersede any provisions in the franchise agreement or related agreements that allow Chesters to use its discretion based on its reasonable business judgment.
This means that while Chesters may have certain decision-making powers outlined in the franchise agreement, those powers are not absolute. Chesters must exercise its judgment in a way that is fair and honest to the franchisee, and cannot act in bad faith. This provides a level of protection for the franchisee against potentially arbitrary or unfair decisions by Chesters.
For a prospective franchisee, this is an important safeguard. It ensures that Chesters cannot use its business judgment to unfairly disadvantage the franchisee. However, it's important to note that the interpretation of "good faith" can be subjective and may require legal interpretation in case of disputes. Franchisees should consult with an attorney to fully understand their rights and obligations under Washington law.