In Washington, under what condition is it unlawful for Jersey Mikes to repurchase a franchisee's business during the term of the franchise agreement?
Jersey_Mikes Franchise · 2025 FDDAnswer from 2025 FDD Document
Provisions in franch ise agreements or related agreements that permit the franchisor to repurchase the franchisee's business for any reason during the term of the franchise agreement without the franchisee's consent are unlawful pursuant to RCW 19.100.180(2)(j), unless the franchise is terminated for good cause.
Source: Item 23 — RECEIPTS (FDD pages 77–421)
What This Means (2025 FDD)
According to Jersey Mikes's 2025 Franchise Disclosure Document, in the state of Washington, it is unlawful for Jersey Mikes to include provisions in franchise agreements that allow them to repurchase a franchisee's business during the franchise term without the franchisee's consent. However, there is an exception to this rule.
Jersey Mikes is permitted to repurchase a franchise if the franchise agreement is terminated for good cause. This means that if a franchisee violates the terms of the agreement, such as failing to meet performance standards or engaging in illegal activities, Jersey Mikes can repurchase the business.
This provision protects Jersey Mikes franchisees in Washington from the franchisor arbitrarily taking back their business during the franchise term. Franchisees should ensure they understand what constitutes "good cause" for termination under the franchise agreement to protect their investment.