Under what circumstances can Chesters franchisees seek treble damages in Washington?
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 settlementafter 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's 2025 Franchise Disclosure Document, franchisees in Washington State have the right to seek treble damages under certain conditions. Specifically, any provisions within the franchise agreement that require franchisees to waive their right to exemplary, punitive, or similar damages are considered void. However, there's an exception: such waivers are permissible if they are part of a negotiated settlement reached after the franchise agreement is already in effect. In these cases, both parties must be represented by independent legal counsel, adhering to the stipulations outlined in RCW 19.100.220(2).
This provision is significant for prospective Chesters franchisees in Washington as it protects their ability to pursue substantial damages in cases of disputes or breaches of contract. Treble damages can significantly increase the potential financial recovery for a franchisee who has suffered harm due to the franchisor's actions. The requirement for a negotiated settlement with independent counsel ensures that any waiver of these rights is made knowingly and voluntarily, rather than being imposed by the franchisor.
It is important for franchisees to understand the circumstances under which they can and cannot waive their rights to such damages. The law aims to balance the franchisor's need for finality in settlements with the franchisee's right to seek full compensation for damages suffered. This protection aligns with the broader goals of the Washington Franchise Investment Protection Act, which seeks to ensure fair dealing and protect franchisees from overreaching by franchisors.
In practical terms, a Chesters franchisee in Washington should be aware that any initial franchise agreement clauses requiring a blanket waiver of punitive damages are unenforceable. However, if a dispute arises later, and the franchisee, with the advice of their own attorney, agrees to a settlement that includes such a waiver, that agreement can be valid. This underscores the importance of seeking independent legal advice before signing any agreements or releases related to the franchise.