When is a waiver of exemplary or punitive damages by a Fat Shack franchisee permissible?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
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).
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to the 2025 Fat Shack Franchise Disclosure Document, provisions requiring franchisees to waive exemplary, punitive, or similar damages are generally void under Washington state law (RCW 19.100.190), which permits franchisees to seek treble damages in certain circumstances. However, there is an exception.
The waiver is permissible only when executed pursuant to a negotiated settlement after the franchise agreement is already in effect. Additionally, both parties, Fat Shack and the franchisee, must be represented by independent counsel during these negotiations, in accordance with RCW 19.100.220(2).
This means that Fat Shack franchisees cannot be compelled to waive their rights to seek exemplary or punitive damages at the outset of the franchise agreement. The ability to waive such rights only arises if a dispute occurs after the agreement is in place, and both parties agree to a settlement negotiated with the advice of their own attorneys. This protects the franchisee from being forced into waiving important legal rights as a condition of obtaining the franchise.