Can provisions in the Cinnaholic franchise agreement or related agreements unreasonably restrict or limit rights or remedies under the Washington Franchise Investment Protection Act?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
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ADDENDUM REQUIRED BY THE STATE OF WASHINGTON
WASHINGTON ADDENDUM TO THE FRANCHISE DISCLOSURE DOCUMENT, THE FRANCHISE AGREEMENT, AND ALL 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.
- 1. 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.
- 2. 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.
- 3. 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.
- 4. 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).
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, several provisions address the interplay between the franchise agreement and the Washington Franchise Investment Protection Act. An addendum to the franchise agreement explicitly states that if there is a conflict of laws, the provisions of the Washington Franchise Investment Protection Act will take precedence. This ensures that the franchisee's rights under Washington law are protected.
Specifically, the Cinnaholic FDD notes that provisions 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. This means that Cinnaholic franchisees in Washington retain their rights to pursue legal remedies under the state's franchise laws, and the franchise agreement cannot unduly limit their ability to do so.
Furthermore, any release or waiver of rights in the franchise agreement that requires a franchisee to waive compliance with any provision under the Washington Franchise Investment Protection Act is void. The only exception is when the release is executed as part of a negotiated settlement after the franchise agreement is already in effect, and both parties are represented by independent legal counsel. This protects franchisees from unknowingly waiving their rights at the outset of the franchise relationship. The franchisee may also terminate the franchise agreement under any grounds permitted under state law.
In addition, any provision in the franchise agreement or related agreements that requires the franchisee to purchase or rent any product or service for more than a fair and reasonable price is unlawful under RCW 19.100.180(2)(d). 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 settlement after the agreement is in effect and where the parties are represented by independent counsel, in accordance with RCW 19.100.220(2).