In Washington, can Dryer Vent Squad restrict a franchisee from soliciting or hiring employees of other franchisees of the same franchisor?
Dryer_Vent_Squad Franchise · 2024 FDDAnswer from 2024 FDD Document
In recognition of the Washington State Franchise Investment Protection Act, Chapter 19.100 RCW, the parties to the attached DVS Holdings, Inc. Franchise Agreement (the "Franchise Agreement") agree as follows:
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.
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.
Source: Item 23 — RECEIPTS (FDD pages 51–207)
What This Means (2024 FDD)
The 2024 Dryer Vent Squad Franchise Disclosure Document includes a Washington FDD Amendment that addresses the relationship between the franchise agreement and Washington State law. Specifically, it acknowledges the Washington State Franchise Investment Protection Act, Chapter 19.100 RCW, and states that its provisions will prevail in the event of a conflict of laws. This means that Washington state law takes precedence over the franchise agreement.
According to the Washington FDD Amendment, RCW 19.100.180 may supersede the franchise agreement, especially concerning termination and renewal. Additionally, court decisions could also override the franchise agreement in these areas. This indicates that certain provisions in the Dryer Vent Squad franchise agreement could be unenforceable if they conflict with Washington law or court rulings.
Regarding restrictive covenants, the Washington FDD Amendment notes that a release or waiver of rights executed by a franchisee cannot include rights under the Washington Franchise Investment Protection Act, except under specific conditions such as a negotiated settlement with independent counsel. Provisions that unreasonably restrict the statute of limitations for claims or rights to a jury trial may also be unenforceable. Therefore, any restrictions on soliciting or hiring employees of other Dryer Vent Squad franchisees would need to comply with the Washington Franchise Investment Protection Act to be enforceable.