factual

For a Ledgers franchise in Washington, what is the effect of RCW 19.100.180(2)(j) on buy-back provisions?

Ledgers Franchise · 2025 FDD

Answer from 2025 FDD Document

Provisions in franchise 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 22 — CONTRACTS (FDD page 46)

What This Means (2025 FDD)

According to the 2025 Ledgers Franchise Disclosure Document, for franchises in Washington, RCW 19.100.180(2)(j) impacts the franchisor's ability to repurchase a franchisee's business. Specifically, provisions that allow Ledgers to repurchase the franchisee's business during the franchise term without the franchisee's consent are unlawful.

However, there is an exception to this rule. Ledgers is permitted to repurchase the franchise if the franchise agreement is terminated for good cause. This means that if the franchisee breaches the agreement or otherwise provides a legitimate reason for termination, Ledgers can then repurchase the business, even without the franchisee's consent.

This protection ensures that Ledgers franchisees in Washington cannot be arbitrarily forced to sell their businesses back to the franchisor during the term of the agreement unless there is a justifiable reason for termination. This provision aims to protect the franchisee's investment and business operations from unwarranted interference by the franchisor, providing a more balanced relationship between Ledgers and its Washington franchisees.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.