Under what conditions is it unlawful for Degree Wellness to repurchase a franchisee's business?

According to Degree Wellness's 2025 Franchise Disclosure Document, it is unlawful for Degree Wellness to repurchase a franchisee's business for any reason during the term of the franchise agreement without the franchisee's consent, unless the franchise is terminated for good cause. This is based on the Revised Code of Washington (RCW) 19.100.180(2)(j). This statute aims to protect franchisees from potentially unfair or arbitrary buy-back provisions that could be detrimental to their investment and business operations.

This provision ensures that Degree Wellness cannot force a franchisee to sell their business back to the company without a legitimate reason, providing a level of security for the franchisee's investment. The "good cause" standard implies that there must be a justifiable and documented reason for the termination, such as a breach of contract or failure to meet performance standards. Without this protection, Degree Wellness could potentially exploit franchisees by repurchasing successful locations at a discount, undermining the franchisee's opportunity to build equity and profit from their efforts.

For a prospective Degree Wellness franchisee, this means that the franchise agreement cannot contain clauses that allow Degree Wellness to repurchase the business at will. Any buy-back provision must be tied to a termination for good cause, offering the franchisee recourse and protection against unwarranted buy-backs. It is important for potential franchisees to carefully review the franchise agreement and understand the conditions under which termination and repurchase can occur, ensuring they are comfortable with the defined terms and protections afforded to them under state law.