We reported last week that the attorneys generals of ten states are investigating several fast food franchisors for their use of so-called “no poach” provisions in their franchise agreements. Well, less than twenty-four hours later, the New York Times has reported that seven fast food franchisors (mostly different ones than those who received the information demands discussed last week) entered into agreements with the Washington State Attorney General’s Office to remove such clauses from their franchise agreements. According to the New York Times:
Many types of franchise businesses impose the clauses, but they may be most prevalent in the restaurant industry. The fast-food sector, in particular, relies overwhelmingly on independently owned and operated franchise stores.
Washington State Attorney General Bob Ferguson is quoted in the article as stating that his “goal is to eliminate these provisions in all fast-food contracts” in Washington State. We will keep you posted on further developments.
