How does Washington law affect non-compete agreements for employees of Craters & Freighters franchisees?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
In the event of a conflict of laws, the provisions of the Washington Franchise Investment Protection Act, Chapter 19.100 RCW will prevail.
RCW 19.100.180 may supersede the franchise agreement in your relationship with the franchisor including the areas of termination and renewal of your franchise. There may also be court decisions which may supersede the franchise agreement in your relationship with the franchisor including the areas of termination and renewal of your franchise.
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 i
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to the 2025 Craters & Freighters FDD, Washington state law has specific implications for franchise agreements, including potential impacts on non-compete clauses. The FDD includes a Washington addendum that states the Washington Franchise Investment Protection Act (Chapter 19.100 RCW) may supersede the franchise agreement, especially in areas concerning termination and renewal. Additionally, court decisions in Washington could also override the franchise agreement in these areas.
For a Craters & Freighters franchisee in Washington, this means that certain provisions of the franchise agreement, including those related to non-compete obligations for employees, might not be fully enforceable if they conflict with Washington law. RCW 19.100.180 is specifically mentioned, indicating that this statute plays a significant role in determining the enforceability of franchise agreement terms within the state.
Furthermore, any release or waiver of rights executed by a Craters & Freighters franchisee cannot include rights under the Washington Franchise Investment Protection Act unless it is part of a negotiated settlement after the agreement is in effect and both parties have legal representation. This ensures that franchisees are not unknowingly giving up their rights under state law. In case of arbitration or mediation involving a franchise purchased in Washington, the venue must be in Washington or a mutually agreed-upon location.