What constitutes 'good cause' for My Salon Suite to repurchase a franchisee's business?
My_Salon_Suite Franchise · 2025 FDDAnswer from 2025 FDD Document
-
- 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.
Franchise agreement provisions, including those summarized in Item 17 of the Franchise Disclosure Document, are subject to state law.
Source: Item 17 — (r) of the FDD and Section 13 of the Franchise Agreement disclose the existence of certain covenants restricting competition to which Franchisee must agree. The Commissioner has held that covenants restricting competition contrary to Section 9-08-06 of the North Dakota Century Code, without further disclosing that such covenants may be subject to this statue, are unfair, unjust, or inequitable within the intent of Section 51-19-09 of the North Dakota Franchise Investment Law. The FDD and the Franchise Agreement are amended accordingly to the extent required by law. (FDD pages 230–274)
What This Means (2025 FDD)
According to the 2025 My Salon Suite Franchise Disclosure Document, the definition of 'good cause' for the franchisor to repurchase a franchisee's business is not explicitly detailed in the provided excerpts, but is referenced within the context of Washington state law. Specifically, Washington state law RCW 19.100.180(2)(j) states that provisions allowing My Salon Suite to repurchase a franchisee's business during the franchise term without the franchisee's consent are unlawful unless the termination is 'for good cause'.
This implies that My Salon Suite's ability to repurchase a franchise is restricted in Washington unless there is a justifiable reason. However, the FDD excerpts do not define what constitutes 'good cause'. This determination would likely depend on the specifics of Washington state law and how it interprets 'good cause' in the context of franchise agreements. The FDD also mentions that RCW 19.100.180 may supersede provisions in the franchise agreement concerning the franchisee's relationship with the franchisor, including termination and renewal.
Prospective franchisees in Washington should be aware of these protections under Washington law. They should seek legal counsel to understand what specific actions or circumstances would legally constitute 'good cause' for My Salon Suite to repurchase their business. Franchisees should also be aware that franchise agreement provisions, including those summarized in Item 17 of the Franchise Disclosure Document, are subject to state law, and there may also be court decisions that supersede the franchise agreement or related agreements concerning the franchisee's relationship with the franchisor.