Money Mailer, LLC v. Brewer, 195 Wn. 2d 1

Summary

The Washington Supreme Court answered two certified questions concerning the meaning of “fair and reasonable price” under the Franchise Investment Protection Act, RCW 19.100.180(2)(d). The court held that whether a price is fair and reasonable is a fact question informed by market forces and that the franchisor’s acquisition price does not alone establish the fair price. It further held that charging a franchisee twice the amount paid for a product or service does not violate the statute as a matter of law.

Holdings

1. Whether a price is fair and reasonable is a question of fact concerning what prudent franchisors and franchisees in similar circumstances would regard as an appropriate price, with attention to market forces.
2. The price at which a franchisor obtains a product or service is not inherently the fair and reasonable price, although it is one factor the fact finder may consider.
3. A franchisor does not violate RCW 19.100.180(2)(d) as a matter of law merely by charging a franchisee twice what the franchisor paid for a product or service.

Questions Presented

1. Whether the price at which a franchisor obtains a product or service inherently establishes the fair and reasonable price under RCW 19.100.180(2)(d).
2. Whether a franchisor violates RCW 19.100.180(2)(d) as a matter of law by charging a franchisee twice what the franchisor paid for a product or service.

Disposition

other