Washington Updates Franchise Registration Requirements

The Washington Department of Financial Institutions Securities Division (the “Securities Division”), which manages franchise registration and renewal filings for the state, recently updated its filing requirements for franchisors. The state’s announcement reads as follows:

Updated Washington Franchise Agreement Addendum.  The Securities Division has provided a sample Washington Franchise Agreement Addendum for many years.  We have updated the Addendum language in light of new legislation prohibiting some noncompetition covenants and non-solicitation agreements (Chapter 49.62 RCW), as well as updates to Franchise Act Interpretive Statement No. 4 (discussed more below).  Please note, at renewal the Division will request that all franchisors conform their Washington Addenda to the language of the updated addendum.  A copy of the updated Washington Franchise Agreement Addendum is available here: https://dfi.wa.gov/sites/default/files/forms/franchise-agreement-addendum.pdf.

Updated Franchise Interpretive Statement No. 4 – FIS-04.  This interpretive statement has been updated to clarify the Division’s requirements regarding provisions in franchise agreements setting the site of arbitration, mediation, and/or litigation.  A copy of the updated interpretive statement is available here: https://dfi.wa.gov/industry/franchise-act-interpretive-statements/franchise-act-interpretive-statement-fis-04.

Updated Notice of Claim of Exemption from Franchise Registration.  The Division has updated the Notice of Claim of Exemption from Franchise Registration for franchisors relying on the exemption from registration for franchisors that meet certain experience and net worth requirements (the “large franchisor” exemption).  This form is now available in a fillable PDF.  Franchisors submitting claims of exemption should start using the new form immediately.  As a reminder, this form is required to be submitted as a .pdf electronically through the electronic filing system.  A copy of the updated form is available here: https://dfi.wa.gov/sites/default/files/forms/claim-of-exemption.pdf.

The Securities Division staff is working remotely during the COVID-19 pandemic and is processing franchise registration and renewal applications normally. As was the case last year, the state is accepting applications only through the electronic filing system.

If you need assistance understanding how to navigate these guidelines in registering your franchise, please feel free to contact me at mkreutzer@howardandhoward.com, or contact any other member of our franchise team.

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