If litigation is not precluded, where can a Ledgers franchisee bring an action related to the sale of franchises?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
In addition, if litigation is not precluded by the franchise agreement, a franchisee may bring an action or proceeding arising out of or in connection with the sale of franchises, or a violation of the Washington Franchise Investment Protection Act, in Washington.
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- General Release.
A release or waiver of rights in the franchise agreement or related agreements purporting to bind the franchisee to waive compliance with any provision under the Washington Franchise Investment Protection Act or any rules or orders thereunder is 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).
In addition, any such release or waiver executed in connection with a renewal or transfer of a franchise is likewise void except as provided for in RCW 19.100.220(2).
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- Statute of Limitations and Waiver of Jury Trial.
Provisions contained in the franchise agreement or related agreements that unreasonably restrict or limit the statute of limitations period for claims under the Washington Franchise Investment Protection Act, or rights or remedies under the Act such as a right to a jury trial, may not be enforceable.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to Ledgers' 2025 Franchise Disclosure Document, if litigation is not precluded by the franchise agreement, a franchisee can bring an action or proceeding arising out of or in connection with the sale of franchises, or a violation of the Washington Franchise Investment Protection Act, in Washington. This means that a Ledgers franchisee may have the option to pursue legal action in Washington state under specific circumstances related to franchise sales or violations of the Washington Franchise Investment Protection Act, assuming the franchise agreement does not prevent such litigation.
This clause is particularly relevant for prospective franchisees as it clarifies the legal venue available to them under certain conditions. It is important to note that this right is contingent on litigation not being precluded by the franchise agreement itself. Franchise agreements often contain clauses that govern dispute resolution, such as arbitration or mediation, which could potentially limit or eliminate the franchisee's ability to bring an action in court.
It is also important to note that the FDD mentions that provisions contained in the franchise agreement or related agreements that unreasonably restrict or limit the statute of limitations period for claims under the Washington Franchise Investment Protection Act, or rights or remedies under the Act such as a right to a jury trial, may not be enforceable. This suggests that while the agreement may attempt to limit certain rights, such limitations may not hold up in court if deemed unreasonable.
Prospective Ledgers franchisees should carefully review the franchise agreement with legal counsel to fully understand their rights and obligations, including any limitations on their ability to pursue litigation and the implications of the venue selection clause. Understanding these aspects is crucial for making an informed decision about investing in a Ledgers franchise.