When is a release or waiver of rights valid for a City Wide franchise in Washington?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
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- General Release. A release or waiver of rights in the franchise agreement or related agreements purporting to bind he 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 an d where the parties are represented by independent counsel, in accordance with RCW 19.100.220(2).
In addition, any such release or waiver executed in connection with a renewal or transfer of a franchise is likely void except as provided for in RCW 19.100.220(2).
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- Statute of Limitations and Waiver of Jury Trial. Provision contained int eh 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.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to the 2025 City Wide Franchise Disclosure Document, a release or waiver of rights within the franchise agreement or related documents, which aims to obligate a franchisee to waive compliance with any provision under the Washington Franchise Investment Protection Act, or any rules or orders associated with it, is considered void. There is an exception to this rule. Such a release or waiver is valid only if it is executed as part of a negotiated settlement after the franchise agreement is already in effect. Additionally, both parties, the franchisor and franchisee, must be represented by independent legal counsel during these negotiations, as mandated by RCW 19.100.220(2). Furthermore, any release or waiver connected to the renewal or transfer of a City Wide franchise is likely to be void unless it adheres to the conditions outlined in RCW 19.100.220(2).
This means that City Wide franchisees in Washington cannot be compelled to sign away their rights under the Washington Franchise Investment Protection Act at the outset of the agreement. This protection ensures that franchisees retain their legal rights and protections afforded by Washington state law. The exception allows for flexibility in resolving disputes later on, but only under strict conditions that ensure the franchisee has proper legal representation and the settlement is genuinely negotiated.
For a prospective City Wide franchisee in Washington, this information is crucial. It highlights that the initial franchise agreement cannot force them to waive their rights under the state's franchise laws. However, it is essential to understand the circumstances under which a waiver might be valid later, particularly if disputes arise or during renewal or transfer processes. Engaging independent counsel is vital if a settlement involving a waiver of rights is being considered to ensure full compliance with RCW 19.100.220(2) and to protect their interests.
It is also important to note that provisions in the franchise agreement that unreasonably restrict the statute of limitations for claims under the Washington Franchise Investment Protection Act or limit rights or remedies under the Act, such as the right to a jury trial, may not be enforceable. This further protects the franchisee's ability to pursue legal action if necessary.