What is the effect of RCW 19.100.180(1) on Ledgers' ability to exercise its business judgment?

According to Ledgers' 2025 Franchise Disclosure Document, provisions in the franchise agreement that allow Ledgers to use its reasonable business judgment may be limited or superseded by Washington state law RCW 19.100.180(1). This statute requires that both parties, Ledgers and the franchisee, deal with each other in good faith.

This means that while the Ledgers franchise agreement may grant Ledgers some discretion in making business decisions, those decisions must be made in good faith, and in accordance with Washington law for franchisees operating in Washington. This could potentially limit Ledgers' ability to act solely in its own self-interest if such actions would be considered a breach of the implied covenant of good faith and fair dealing.

For a prospective Ledgers franchisee in Washington, this provides some protection against potentially arbitrary or unfair decisions by Ledgers. It ensures that Ledgers must consider the franchisee's interests and act honestly and fairly in its dealings with them. Franchisees should seek legal counsel to fully understand their rights and protections under RCW 19.100.180(1).