How might RCW 19.100.180(1) limit or supersede provisions in the Fat Shack franchise agreement regarding the franchisor's business judgment?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
Provisions in the franchise 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that the franchisor may exercise its discretion on the basis of its reasonable business judgment may be limited or superseded by RCW 19.100.180(1), which requires the parties to deal with each other in good faith.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to the 2025 Fat Shack Franchise Disclosure Document, provisions in the franchise agreement that allow Fat Shack to use its business judgment may be limited by Washington state law. Specifically, RCW 19.100.180(1) requires that both parties, Fat Shack and the franchisee, deal with each other in good faith.
This means that while the franchise agreement might give Fat Shack some discretion in making business decisions, this discretion isn't absolute. The "good faith" requirement means Fat Shack must act honestly and fairly in its dealings with franchisees. If a franchisee believes that Fat Shack is making decisions based on unreasonable business judgment or not in good faith, the franchisee may have grounds to challenge those decisions under Washington law.
For a prospective Fat Shack franchisee in Washington, this is an important protection. It prevents Fat Shack from using its business judgment in a way that unfairly harms the franchisee. However, it's important to remember that this doesn't eliminate Fat Shack's ability to make decisions for the overall benefit of the franchise system. It simply requires that those decisions be made in good faith and with fairness toward the franchisee.