Under what conditions does the Washington Addendum apply to the Chicken Guy Franchise Agreement?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
WASHINGTON ADDENDUM TO THE FRANCHISE AGREEMENT AND RELATED AGREEMENTS
As a result, any such provisions contained in the franchise agreement or elsewhere are void and unenforceable in Washington.
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- 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.
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- 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).
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- 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.
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- Surety Bond. The following language is added to the end of Section 7.A. of the Franchise Agreement:
A surety bond in the amount of $100,000 has been obtained by Chicken Guy. The Washington Securities Division has made the issuance of Chicken Guy's permit contingent upon Chicken Guy maintaining surety bond coverage acceptable to the Administrator until (a) all Washington franchisees have (i) received all initial training that they are entitled to under the Franchise Agreement or Chicken Guy's franchise disclosure document, and (ii) are open for business; or (b) the Administrator issues written authorization to the contrary.
Except as expressly modified by this Addendum, the Franchise Agreement remains unmodified and in full force and effect.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 40–46)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, the Washington Addendum to the Franchise Agreement is required when offering or selling a franchise in the state of Washington. This addendum modifies specific sections of the standard Chicken Guy franchise agreement to comply with Washington state law.
Several provisions within the Washington Addendum address specific legal protections for franchisees. For instance, it ensures that franchisees cannot waive claims under state franchise law, including claims related to fraud. It also protects the franchisee's right to communicate with regulatory bodies, overriding any conflicting terms in the standard agreement. These stipulations are particularly important for safeguarding franchisees' rights and ensuring compliance with Washington's franchise regulations.
Furthermore, Chicken Guy has obtained a $100,000 surety bond to comply with Washington's requirements. The Washington Securities Division requires Chicken Guy to maintain this bond until all Washington franchisees have completed their initial training and opened for business, or until the Administrator provides written authorization to discontinue the bond. This bond serves as a financial assurance for franchisees in Washington, providing an additional layer of protection.
Prospective Chicken Guy franchisees in Washington should carefully review the Washington Addendum alongside the standard Franchise Agreement to fully understand their rights and obligations under Washington law. The addendum's modifications are designed to provide additional clarity and protection for franchisees operating in the state.