Can provisions in the Fat Shack franchise agreement that permit the franchisor to repurchase the franchisee's business be enforced in Washington if the franchise is terminated for good cause?

According to the 2025 Fat Shack Franchise Disclosure Document, provisions in the franchise agreement that allow Fat Shack to repurchase a franchisee's business are generally unlawful in Washington state under RCW 19.100.180(2)(j) if they can be exercised "for any reason during the term of the franchise agreement without the franchisee's consent." However, there is an exception: such buy-back provisions can be enforced if the franchise is terminated for good cause. This means that if a Fat Shack franchisee in Washington violates the franchise agreement in a significant way, leading to termination, Fat Shack may have the right to repurchase the business.

This stipulation protects Fat Shack franchisees in Washington from losing their business due to arbitrary or unfair buy-back provisions. The "good cause" requirement ensures that Fat Shack can only repurchase a franchise if there is a legitimate reason, such as a breach of contract by the franchisee. This aligns with franchise law's general intent to balance the rights and obligations of both franchisors and franchisees.

For a prospective Fat Shack franchisee in Washington, this means understanding what constitutes "good cause" for termination under the franchise agreement is crucial. It would be prudent to seek legal counsel to fully understand their rights and obligations under Washington's Franchise Investment Protection Act (RCW 19.100) and how it interacts with the Fat Shack franchise agreement.