How does the Washington Franchise Investment Protection Act affect the termination of a Chesters franchise?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
y grounds for default or termination stated in the franchise agreement does not constitute "reasonable cause," as that term may be defined in the Virginia Retail Franchising Act or the laws of Virginia, that provision may not be enforceable.
WASHINGTON
WASHINGTON ADDENDUM TO FRANCHISE DISCLOSURE DOCUMENT, THE FRANCHISE AGREEMENT, FRANCHISE REPRESENTATIONS, AND RELATED AGREEMENTS
The provisions of this Addendum form an integral part of, are incorporated into, and modify the Franchise Disclosure Document, the franchise agreement, and all related agreements regardless of anything to the contrary contained therein. This Addendum applies if: (a) the offer to sell a franchise is accepted in Washington; (b) the purchaser of the franchise is a resident of Washington; and/or (c) the franchised business that is the subject of the sale is to be located or operated, wholly or partly, in Washington.
- Conflict of Laws. In the event of a conflict of laws, the provisions of the Washington Franchise Investment Protection Act, chapter 19.100 RCW will prevail.
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- Franchisee Bill of Rights. RCW 19.100.180 may supersede provisions in the franchise agreement or related agreements concerning your relationship with the franchisor, including in the areas of termination and renewal of your franchise. There may also be court decisions that supersede the franchise agreement or related agreements concerning your relationship with the franchisor. Franchise agreement provisions, including those summarized in Item 17 of the Franchise Disclosure Document, are subject to state law.
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- Site of Arbitration, Mediation, and/or Litigation. In any arbitration or mediation involving a franchise purchased in Washington, the arbitration or mediation site will be either in the state of Washington, or in a place mutually agreed upon at the time of the arbitration or mediation, or as determined by the arbitrator or mediator at the time of arbitration or mediation. In addition, if litigation is not precluded by the franchise agreement, a franchisee may bring an action or proceeding arising out of or in connection with the sale of franchises, or a violation of the Washington Franchise Investment Protection Act, in Washington.
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- General Release. A release or waiver of rights in the franchise agreement or related agreements purporting to bind the franchisee to waive compliance with any provision under the Washington Franchise Investment Protection Act or any rules or orders thereunder is 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). In addition, any such release or waiver executed in connection with a renewal or transfer of a franchise is likewise void except as provided for in RCW 19.100.220(2).
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- Statute of Limitations and Waiver of Jury Trial. Provisions contained in the franchise agreement or related agreements that unreasonably restrict or limit the statute of limitations period for claims under the Washington Franchise Investment Protection Act, or rights or remedies under the Act such as a right to a jury trial, may not be enforceable.
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- Transfer Fees.
Source: Item 23 — **RECEIPTS (FDD pages 48–197)
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, the Washington Franchise Investment Protection Act (WFIPA) significantly impacts franchise agreements within the state, particularly concerning termination and franchisee rights. The FDD includes a Washington addendum that modifies the standard franchise agreement to comply with Washington law. RCW 19.100.180, part of the WFIPA, may supersede provisions in the franchise agreement related to the franchisee's relationship with Chesters, including termination and renewal terms. This means that certain termination clauses in Chesters's standard agreement might not be enforceable in Washington if they conflict with the WFIPA.
Specifically, the addendum states that in the event of conflicting laws, the WFIPA will prevail, ensuring that franchisees in Washington receive the protections afforded to them under state law. Furthermore, any release or waiver of rights that requires a franchisee to waive compliance with the WFIPA is void unless it meets specific conditions, such as being part of a negotiated settlement with independent legal representation. This provision prevents Chesters from including clauses that might inadvertently or intentionally strip franchisees of their rights under the WFIPA.
Additionally, the WFIPA affects Chesters's ability to repurchase a franchisee's business. Provisions allowing Chesters to repurchase the business without the franchisee's consent are unlawful unless the franchise is terminated for good cause. The franchisee also has the right to terminate the franchise agreement on any grounds permitted by state law. These stipulations provide significant protections for Chesters franchisees in Washington, ensuring fair treatment and adherence to state regulations regarding franchise termination and repurchase.
Moreover, any provisions in the franchise agreement that unreasonably restrict the statute of limitations for claims under the WFIPA or limit rights and remedies, such as the right to a jury trial, may not be enforceable. Similarly, any provision requiring a franchisee to purchase or rent products or services at an unfair or unreasonable price is unlawful under RCW 19.100.180(2)(d). These measures collectively strengthen the franchisee's position, ensuring that the franchise agreement adheres to Washington law and provides a fair and equitable relationship between Chesters and its franchisees in the state.