On November 1, 2023, the securities division of the department of financial institutions adopted Franchise Act Interpretive Statement No. 9 – Disclosure of Franchise Fees.

The adoption of Franchise Act Interpretive Statement No. 9 responds to reports of franchisors charging fees to franchisees that were not disclosed in the franchise disclosure document. Franchise Act Interpretive Statement No. 9 explains a franchisor must disclose all fees, including prospective fees, to a prospective franchisee in the franchise disclosure document prior to the execution of the franchise agreement or the receipt of any payment by the franchisor or any of its affiliates, and further explains that a franchisor cannot impose a fee, through the operations manual or otherwise, without presale disclosure.

Please contact Timothy Varney by phone 360-902-8785 or email timothy.varney@dfi.wa.gov with any questions or to obtain a copy of the Franchise Act Interpretive Statement No. 9.