Under what conditions is it unlawful for My Salon Suite to repurchase a franchisee's business?
My_Salon_Suite 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 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, specifically concerning Washington State, there are conditions under which My Salon Suite's ability to repurchase a franchisee's business is restricted. Provisions in franchise agreements that allow My Salon Suite to repurchase a franchisee's business during the franchise term without the franchisee's consent are unlawful. However, this restriction does not apply if the franchise is terminated for good cause.
This protection is provided under Washington State law (RCW 19.100.180(2)(j)), which aims to protect franchisees from potentially unfair buy-back provisions. The law ensures that My Salon Suite cannot arbitrarily decide to repurchase a successful franchise location simply to take over its operations, unless there is a legitimate reason for terminating the agreement, such as the franchisee's failure to comply with the terms of the agreement.
For a prospective My Salon Suite franchisee in Washington, this means that the franchise agreement cannot force them to sell their business back to My Salon Suite without their consent unless My Salon Suite has good cause to terminate the franchise agreement. This provides a level of security and control for the franchisee, knowing that their investment is protected from arbitrary buy-back actions by My Salon Suite. It is important for franchisees to understand what constitutes "good cause" for termination, as defined by Washington law and the franchise agreement, to fully understand their rights and obligations.