How might RCW 19.100.180 affect the Ledgers franchise agreement in Washington?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
RCW 19.100.180 may supersede provisions in the franchise agreement or related agreements concerning your relationship with the franchisor, including in the areas of termination and renewal of your franchise.
There may also be court decisions that supersede the franchise agreement or related agreements concerning your relationship with the franchisor.
Franchise agreement provisions, including those summarized in Item 17 of the Franchise Disclosure Document, are subject to state law.
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.
Any provision in the franchise agreement or related agreements that requires the franchisee to purchase or rent any product or service for more than a fair and reasonable price is unlawful under RCW 19.100.180(2)(d).
Any provision in the franchise agreement or related agreements that prohibits the franchisee from communicating with or complaining to regulators is inconsistent with the express instructions in the Franchise Disclosure Document and is unlawful under RCW 19.100.180(2)(h).
Provisions in the franchise agreement or related agreements stating that the franchisor may exercise its discretion on the basis of its reasonable business judgment may be limited or superseded by RCW 19.100.180(1), which requires the parties to deal with each other in good faith.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to Ledgers's 2025 Franchise Disclosure Document, RCW 19.100.180, part of the Washington Franchise Investment Protection Act, can impact several aspects of the franchise agreement for franchisees operating in Washington state. Specifically, the FDD states that RCW 19.100.180 may supersede provisions in the franchise agreement or related agreements concerning the franchisee's relationship with Ledgers, especially in areas of termination and renewal of the franchise. This means that certain terms in the standard Ledgers franchise agreement that might conflict with the statute could be rendered invalid or unenforceable in Washington.
Several specific clauses within the Ledgers franchise agreement are highlighted as potentially conflicting with Washington law. For example, provisions allowing Ledgers to repurchase the franchisee's business during the term without consent are unlawful under RCW 19.100.180(2)(j), unless the termination is for good cause. Similarly, any requirement for a franchisee to purchase or rent products/services at more than a fair and reasonable price is unlawful under RCW 19.100.180(2)(d). Furthermore, any provision prohibiting a franchisee from communicating with regulators is inconsistent with the Franchise Disclosure Document and unlawful under RCW 19.100.180(2)(h).
Additionally, the FDD notes that provisions stating Ledgers may exercise discretion based on reasonable business judgment may be limited by RCW 19.100.180(1), which mandates that both parties deal with each other in good faith. This implies that Ledgers's business decisions regarding the franchise must adhere to a standard of good faith, potentially limiting the franchisor's flexibility if a decision is challenged. These stipulations are included in the Washington Addendum to the Franchise Disclosure Document, franchise agreement, and related agreements, and they apply if the franchise offer is accepted in Washington, the purchaser is a Washington resident, or the franchised business operates in Washington.