Does the Chicken Guy franchise agreement contain provisions that might be unenforceable in Washington?

unenforceable against an independent contractor of a franchisee under RCW 49.62.030 unless the independent contractor's earnings from the party seeking enforcement, when annualized, exceed $250,000 per year (an amount that will be adjusted annually for inflation). As a result, any provision contained in the franchise agreement or elsewhere that conflicts with these limitations is void and unenforceable in Washington.

• 1. Nonsolicitation Agreements. RCW 49.62.060 prohibits a franchisor from restricting, restraining, or prohibiting a franchisee from (i) soliciting or hiring any employee of a franchisee of the same franchisor or (ii) soliciting or hiring any employee of the franchisor. As a result, any such provisions contained in the franchise agreement or elsewhere are void and unenforceable in Washington.
• 1. Questionnaires and Acknowledgments. No statement, questionnaire, or acknowledgment signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise.
• 1. Prohibitions on Communicating with Regulators. Any provision in the franchise agreement or related agreements that prohibits the franchisee from communicating with or complaining to regulators is inconsistent with the express instructions in the Franchise Disclosure Document and is unlawful under RCW 19.100.180(2)(h).
• 1. Advisory Regarding Franchise Brokers. Under the Washington Franchise Investment Protection Act, a "franchise broker" is defined as a person that engages in the business of the offer or sale of franchises. A franchise broker represents the franchisor and is paid a fee for referring prospects to the franchisor and/or selling the franchise. If a franchisee is working with a franchise broker, franchisees are advised to carefully evaluate any information provided by the franchise broker about a franchise.
• 1. Item 5: Initial Fees. We have obtained a surety bond in the amount of $100,000. The Washington Securities Division has made the issuance of our franchise registration permit contingent upon our maintenance of surety bond coverage acceptable to the state administrator until (a) all Washington franchisees have (1) received all initial training that they are entitled to under the Franchise Agreement or disclosure document, and (2) are open for business; or (b) the state administrator issues written authorization to the contrary.

EXHIBIT K

STATE SPECIFIC ADDENDA TO THE AGREEMENTS

California Illinois Maryland Minnesota New York North Dakota Rhode Island South Dakota Washington

ADDENDA REQUIRED BY

THE STATE OF CALIFORNIA

ADDENDUM TO THE CHICKEN GUY! RESTAURANT DEVELOPMENT AGREEMENT REQUIRED FOR CALIFORNIA DEVELOPERS

• **1.

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 40–46)