How does the Washington Franchise Investment Protection Act affect the Ledgers franchise agreement?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
he initial franchise fee and other initial payments owed by franchisees to the franchisor until the franchisor has completed its pre-opening obligations under the franchise agreement."
Washington Addendum to the Franchise Disclosure Document, Franchise Agreement, and Related Agreements
The provisions of this Addendum form an integral part of, are incorporated into, and modify the Franchise Disclosure Document, the franchise agreement, and all related agreements regardless of anything to the contrary contained therein. This Addendum applies if: (a) the offer to sell a franchise is accepted in Washington; (b) the purchaser of the franchise is a resident of Washington; and/or (c) the franchised business that is the subject of the sale is to be located or operated, wholly or partly, in Washington.
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- Conflict of Laws. In the event of a conflict of laws, the provisions of the Washington Franchise Investment Protection Act, chapter 19.100 RCW will prevail.
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- Franchisee Bill of Rights. 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.
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- Site of Arbitration, Mediation, and/or Litigation. In any arbitration or mediation involving a franchise purchased in Washington, the arbitration or mediation site will be either in the state of Washington, or in a place mutually agreed upon at the time of the arbitration or mediation, or as determined by the arbitrator or mediator at the time of arbitration or mediation. 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.
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- Transfer Fees. Transfer fees are collectable only to the extent that they reflect the franchisor's reasonable estimated or actual costs in effecting a transfer.
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- Termination by Franchisee. The franchisee may terminate the franchise agreement under any grounds permitted under state law.
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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.
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- Fair and Reasonable Pricing. 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).
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- Waiver of Exemplary & Punitive Damages. RCW 19.100.190 permits franchisees to seek treble damages under certain circumstances.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to Ledgers' 2025 Franchise Disclosure Document, the Washington Franchise Investment Protection Act significantly impacts the franchise agreement for franchisees in Washington state. A Washington Addendum modifies the standard franchise agreement to ensure compliance with Washington law. This addendum applies if the franchise is offered or accepted in Washington, if the purchaser is a Washington resident, or if the franchised business will operate in Washington.
Several provisions within the Ledgers franchise agreement are subject to the Washington Franchise Investment Protection Act. For example, the addendum states that the provisions of the Washington Franchise Investment Protection Act, chapter 19.100 RCW, will take precedence in the event of any conflict of laws. RCW 19.100.180 may also supersede provisions in the franchise agreement or related agreements concerning the franchisee's relationship with Ledgers, particularly in areas of termination and renewal. The FDD also states that any provisions 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).
Additionally, certain clauses within the franchise agreement are rendered void and unenforceable in Washington. These include provisions that conflict with limitations imposed by Washington law, such as those concerning non-solicitation agreements that restrict a franchisee from soliciting or hiring employees of Ledgers or its other franchisees. Also, any statement, questionnaire, or acknowledgment signed by a franchisee cannot waive claims under state franchise law, including fraud in the inducement, or disclaim reliance on statements made by Ledgers or its representatives. Transfer fees are collectable only to the extent that they reflect Ledgers' reasonable estimated or actual costs in effecting a transfer.
For Washington franchisees, the location for arbitration, mediation, or litigation must be in Washington state or a mutually agreed-upon location. Franchisees may also bring legal action in Washington for issues related to the sale of the franchise or violations of the Washington Franchise Investment Protection Act, if litigation is not precluded by the franchise agreement. Furthermore, any release or waiver of rights under the Washington Franchise Investment Protection Act is void unless executed during a negotiated settlement with independent counsel after the agreement is in effect, or as provided in RCW 19.100.220(2).