For a Ledgers franchise in Washington, what is the effect of RCW 19.100.180(2)(j) on provisions that permit the franchisor to repurchase the franchisee's business?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Certain Buy-Back Provisions.
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 operating in Washington state, RCW 19.100.180(2)(j) impacts the franchisor's ability to repurchase a franchisee's business. Specifically, provisions allowing Ledgers to repurchase the franchise for any reason during the franchise term without the franchisee's consent are unlawful.
However, this restriction does not apply if the franchise agreement is terminated for good cause. This means that Ledgers can only repurchase a franchise in Washington without the franchisee's consent if there is a legitimate reason for terminating the agreement, as defined by Washington law.
This provision protects Ledgers franchisees in Washington from arbitrary buy-backs by the franchisor, ensuring that they can only lose their business if there is a justifiable cause for termination. Prospective franchisees should carefully review the franchise agreement and Washington law to understand what constitutes "good cause" for termination.