If there is litigation regarding a Circle K franchise purchased in Washington, is litigation precluded by the franchise agreement?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
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. A release or waiver of rights executed by a franchisee may not include rights under the Washington Franchise Investment Protection Act or any rule or order thereunder except when executed pursuant to a negotiated settlement after the agreement is in effect and where the parties are represented by independent counsel. Provisions such as those which unreasonably restrict or limit the statute of limitations period for claims under the Act, or rights or remedies under the Act such as a right to a jury trial, may not be enforceable.
Source: Item 22 — CONTRACTS (FDD page 100)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, the franchise agreement does not necessarily preclude litigation for franchises purchased in Washington. The FDD specifies that if the franchise agreement does not preclude litigation, a franchisee can initiate legal action in Washington concerning the sale of franchises or violations of the Washington Franchise Investment Protection Act. This indicates that the franchise agreement may or may not contain provisions that prevent franchisees from suing Circle K.
Furthermore, the FDD states that any release or waiver of rights executed by a Circle K franchisee cannot waive rights under the Washington Franchise Investment Protection Act unless it's part of a negotiated settlement after the franchise agreement is in effect and the franchisee has independent legal representation. This protects franchisees from unknowingly waiving their rights at the outset of the agreement. Provisions that unreasonably restrict the statute of limitations or rights to a jury trial under the Act may also be unenforceable.
In the event of arbitration or mediation, the venue must be in Washington state or another location mutually agreed upon, or as determined by the arbitrator or mediator. This offers a degree of protection to Washington franchisees, ensuring that they are not forced to resolve disputes in a distant or inconvenient location. Prospective Circle K franchisees in Washington should carefully review the franchise agreement to understand whether it contains any clauses that might limit their ability to litigate disputes with the franchisor.