factual

Does the Washington Franchise Investment Protection Act affect the Del Taco franchise agreement?

Del_Taco Franchise · 2025 FDD

Answer from 2025 FDD Document

y removes the non-solicitation and no-hire provisions. JIB also removed both provisions from its current

Franchise Agreement, Development Agreement, and Related Agreements:

    1. Conflict of Laws. In the event of a conflict of laws, the provisions of the Washington Franchise Investment Protection Act, chapter 19.100 RCW will prevail.
    1. Franchisee Bill of Rights. RCW 19.100.180 may supersede provisions in the Development Agreement or related agreements concerning your relationship with the franchisor, including in the areas of termination and renewal of your franchise. There may also be court decisions that supersede the Development Agreement or related agreements concerning your relationship with the franchisor. Development agreement provisions, including those summarized in Item 17 of the Franchise Disclosure Document, are subject to state law.
    1. Site of Arbitration, Mediation, and/or Litigation. 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 Development 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.
    1. General Release. A release or waiver of rights in the Development Agreement or related agreements purporting to bind the 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 and 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 likewise void except as provided for in RCW 19.100.220(2).

    1. Statute of Limitations and Waiver of Jury Trial. Provisions contained in the Development 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.
    1. Transfer Fees. Transfer fees are collectable only to the extent that they reflect the franchisor's reasonable estimated or actual costs in effecting a transfer.
    1. Termination by Franchisee. The franchisee may terminate the Development Agreement under any grounds permitted under state law.
    1. Certain Buy-Back Provisions. Provisions in Development Agreements or related agreements that permit the franchisor to repurchase the franchisee's business for any reason during the term of the Development Agreement without the franchisee's consent are unlawful pursuant to RCW 19.100.180(2)(j), unless the franchise is terminated for good cause.
    1. Fair and Reasonable Pricing. Any provision in the Development Agreement or related agreements that requires the franchisee to purchase or rent any product or service for more than a fair and reasonable price is unlawful under RCW 19.100.180(2)(d).
    1. Waiver of Exemplary & Punitive Damages. RCW 19.100.190 permits franchisees to seek treble damages under certain circumstances. Accordingly, provisions contained in the franchise agreement or elsewhere requiring franchisees to waive exemplary, punitive, or similar damages are void, except when executed pursuant to a negotiated settlement after the agreement is in effect and where the parties are represented by independent counsel, in accordance with RCW 19.100.220(2).
    1. Franchisor's Business Judgement. Provisions in the Development Agreement or related agreements stating that the franchisor may exercise its discretion on the basis of its reasonable business judgment may be limited or superseded by RCW 19.100.180(1), which requires the parties to deal with each other in good faith.
    1. Indemnification. Any provision in the Development Agreement or related agreements requiring the franchisee to indemnify, reimburse, defend, or hold harmless the franchisor or other parties is hereby modified such that the franchisee has no obligation to indemnify, reimburse, defend, or hold harmless the franchisor or any other indemnified party for losses or liabilities to the extent that they are caused by the indemnified party's negligence, willful misconduct, strict liability, or fraud.

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 42–46)

What This Means (2025 FDD)

Yes, according to Del Taco's 2025 Franchise Disclosure Document, the Washington Franchise Investment Protection Act does affect the franchise agreement, development agreement, and related agreements for franchises in Washington state. In the event of a conflict of laws, the provisions of the Washington Franchise Investment Protection Act will take precedence.

Several specific provisions are outlined to ensure compliance with Washington law. These include the franchisee's bill of rights, which may supersede parts of the development agreement, especially concerning termination and renewal. The FDD also clarifies that any general release or waiver of rights that would prevent a franchisee from compliance with the Washington Franchise Investment Protection Act is void, unless it meets specific conditions such as being part of a negotiated settlement with independent legal representation.

Furthermore, the FDD addresses issues such as the site of arbitration, mediation, and litigation, ensuring that these proceedings can occur in Washington state. It also states that non-solicitation agreements that restrict a franchisee from hiring employees of other Del Taco franchisees or the franchisor are unenforceable. Additionally, any clauses that prohibit a franchisee from communicating with regulators are deemed unlawful. Del Taco also defers the payment of any initial franchise fees until the franchisee has received all initial training and is open for business.

These stipulations collectively aim to protect the rights of Del Taco franchisees in Washington and ensure that the franchise agreement adheres to state law. Prospective franchisees in Washington should carefully review these addenda to understand their rights and obligations under the Washington Franchise Investment Protection Act.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.