Can a Cool Binz franchisee bring an action in Washington for violations of the Washington Franchise Investment Protection Act?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
offset by any amounts owed by the franchisee to the franchisor.
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- 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.
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- 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. Accordingly, Items 17(c) and Item 17(m) of the FDD, and required by Sections 10.B.8 and 11.C of the Franchise Agreement, does not apply to claims arising under the Franchise Investment Protection Act, chapter 19.100 RCW, or any rules or order adopted thereunder, in accordance with RCW 19.100.220(2).
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- Transfer fees are collectable only to the extent that they compensate the franchisor for expenses directly incurred as a result of transfer .
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- Pursuant to RCW 49.62.020, a noncompetition covenant is void and unenforceable against an employee, including an employee of a franchisee, unless the employee's earnings from the party seeking enforcement, when annualized, exceed $100,000 per year (an amount that will be adjusted annually for inflation). In addition, a noncompetition covenant is void and unenforceable against an independent contractor of a franchisee under RCW 49.62.030 unless the independent contractor's earnings from the party seeking enforcement, when annualized, exceed $250,000 per year (an amount that will be adjusted annually for inflation). As a result, any provisions contained in the franchise agreement or elsewhere that conflict with these limitations are void and unenforceable in Washington.
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- RCW 49.62.060 prohibits a franchisor from restricting, restraining, or prohibiting a franchisee from (i) soliciting or hiring any employee of a franchisee of the same franchisor or (ii) soliciting or hiring any employee of the franchisor. As a result, any such provisions contained in the franchise agreement or elsewhere are void and unenforceable in Washington.
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- Section 1.F.
Source: Item 23 — RECEIPTS (FDD pages 63–238)
What This Means (2025 FDD)
According to the 2025 Cool Binz Franchise Disclosure Document, a franchisee may bring an action in Washington arising out of or in connection with the sale of franchises, or a violation of the Washington Franchise Investment Protection Act, if litigation is not precluded by the franchise agreement.
This means that Cool Binz franchisees in Washington have the right to pursue legal action in Washington courts for violations of the state's franchise laws, provided the franchise agreement doesn't prohibit litigation. This protects franchisees by ensuring they can seek remedies under their local laws without being forced to litigate in a different jurisdiction or under different legal standards.
Additionally, the FDD states that a release or waiver of rights executed by a Cool Binz franchisee may not include rights under the Washington Franchise Investment Protection Act, except when executed pursuant to a negotiated settlement after the agreement is in effect and where the parties are represented by independent counsel. This provision prevents franchisees from unknowingly or unintentionally giving up their rights under the Washington Franchise Investment Protection Act, ensuring they retain the ability to pursue claims if necessary. Provisions that 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.
Furthermore, certain sections of the Cool Binz Franchise Agreement do not apply to Washington franchisees, including Section 14.D, Section 15.K, Section 15.L, Section 17, Section 18 and Section 16 of Exhibit D, Personal Guaranty and Guaranty of Spouses and Questions 5-9 of Exhibit H, the Disclosure Acknowledgement Questionnaire. Also, Section 15.C of the Franchise Agreement is amended to state that Franchisee only agrees to reimburse Franchisor for all reasonable attorneys' fees and other expenses incurred if the Franchisor is the prevailing party in a lawsuit or arbitration. Section 15.I of the Franchise Agreement, Section IV. 9 of the Personal Guaranty, and Section 8 of the Franchise Management Software License Agreement are amended to state that the waiver of punitive, exemplary, incidental, indirect, special or consequential damages do not apply to Washington franchises.