Are provisions in the Cinnaholic franchise agreement stating that the franchisor may exercise its discretion on the basis of its reasonable business judgment subject to any limitations?

According to Cinnaholic's 2025 Franchise Disclosure Document, provisions in the franchise agreement that allow Cinnaholic to exercise its discretion based on reasonable business judgment may be limited. Specifically, in the state of Washington, these provisions are subject to RCW 19.100.180(1), which mandates that both parties must deal with each other in good faith. This means that while Cinnaholic retains some discretionary power, it cannot act unfairly or in bad faith towards its franchisees in Washington.

This limitation is significant for prospective Cinnaholic franchisees in Washington because it provides a legal standard—good faith—that can be used to challenge decisions made by Cinnaholic that appear unreasonable or unfair. It doesn't eliminate Cinnaholic's discretion, but it does require that their decisions be justifiable and not detrimental to the franchisee without a legitimate business reason. This protection is particularly relevant in areas where the franchise agreement might otherwise give Cinnaholic broad authority.

For franchisees outside of Washington, the general principle of good faith and fair dealing may still apply, but it might not be as explicitly stated or enforced as it is under Washington law. Franchisees in other states should consult with an attorney to understand the extent to which similar protections exist in their jurisdiction. It is also important to note that this good faith requirement does not apply to every aspect of the franchise agreement, but rather to those provisions where Cinnaholic is granted discretionary decision-making power based on its business judgment.