Can a Fat Shack franchisee terminate the franchise agreement under state law in Washington?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Termination by Franchisee.
The franchisee may terminate the franchise agreement under any grounds permitted under state law.
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- 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 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.
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- General Release.
A release or waiver of rights in the franchise 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).
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- Statute of Limitations and Waiver of Jury Trial.
Provisions contained in the franchise 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.
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- 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.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to the 2025 Fat Shack Franchise Disclosure Document, a franchisee in Washington can terminate the franchise agreement based on grounds permitted by state law. This means that Washington state law provides certain rights to Fat Shack franchisees to end the agreement, regardless of what the franchise agreement itself says about termination. This ensures that franchisees are protected by the specific laws of their state, which may offer broader termination rights than the standard Fat Shack franchise agreement.
Additionally, the FDD specifies that in arbitration or mediation involving a franchise purchased in Washington, the site will be in Washington, or a place mutually agreed upon. If litigation isn't precluded by the franchise agreement, a franchisee can bring an action related to the sale of franchises or a violation of the Washington Franchise Investment Protection Act in Washington. This is beneficial for Washington franchisees as it allows for legal proceedings to occur within their state, potentially reducing costs and increasing convenience.
The FDD also addresses releases or waivers of rights, stating that any release or waiver purporting to waive compliance with any provision under the Washington Franchise Investment Protection Act is void unless 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). Similarly, any such release or waiver executed in connection with a renewal or transfer of a franchise is void except as provided for in RCW 19.100.220(2). This protects franchisees from unknowingly waiving their rights under the Washington Franchise Investment Protection Act.
Furthermore, provisions in the franchise agreement 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. Transfer fees are collectable only to the extent that they reflect Fat Shack's reasonable estimated or actual costs in effecting a transfer. These stipulations provide additional safeguards for Fat Shack franchisees in Washington, ensuring fair treatment and adherence to state laws.