When is a waiver of exemplary damages valid for a Cordova franchise?

According to Cordova's 2025 Franchise Disclosure Document, provisions requiring franchisees to waive exemplary, punitive, or similar damages are generally void in Washington state. However, there is an exception: such waivers are valid if executed pursuant to a negotiated settlement after the franchise agreement is already in effect. Additionally, for the waiver to be valid, both Cordova and the franchisee must be represented by independent counsel during the negotiation and execution of the settlement, as dictated by RCW 19.100.220(2).

This means that Cordova franchisees in Washington cannot be compelled to waive their right to seek exemplary or punitive damages at the outset of the franchise agreement. This protection ensures that franchisees retain the ability to pursue such damages if circumstances warrant it. However, if a dispute arises after the franchise agreement is in place, and both parties, with the assistance of their own lawyers, reach a negotiated settlement that includes a waiver of these damages, that waiver will be enforceable.

For prospective Cordova franchisees, this information is crucial for understanding their rights and potential liabilities. It highlights the importance of having independent legal counsel review the franchise agreement and any subsequent settlement negotiations. Franchisees should be aware that while they cannot be forced to waive these damages upfront, they can agree to do so later under specific conditions. This clause aims to protect franchisees from being coerced into disadvantageous agreements while allowing for flexibility in resolving disputes through negotiated settlements.