In Washington, what is the minimum annualized earnings threshold for an employee of an Annex Brands franchisee for a noncompetition covenant to be enforceable?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
ing a transfer.
Pursuant to RCW 49.62.020, a noncompetition covenant is void and unenforceable against an employee, including an employee of a franchisee, unless the employee's earnings from the party seeking enforcement, when annualized, exceed $100,000 per year (an amount that will be adjusted annually for inflation). In addition, a noncompetition covenant is void and unenforceable against an independent contractor of a franchisee under RCW 49.62.030 unless the independent contractor's earnings from the party seeking enforcement, when annualized, exceed $250,000 per year (an amount that will be adjusted annually for inflation). As a result, any provisions contained in the Franchise Agreement or elsewhere that conflict with these limitations are void and unenforceabl
Source: Item 22 — Contracts (FDD pages 109–110)
What This Means (2025 FDD)
According to Annex Brands' 2025 Franchise Disclosure Document, in Washington, a noncompetition covenant is void and unenforceable against an employee of an Annex Brands franchisee unless the employee's earnings, when annualized, exceed $100,000 per year. This amount will be adjusted annually for inflation.
This means that if an Annex Brands franchisee in Washington wants to enforce a non-compete agreement against an employee, that employee must be earning at least $100,000 annually (adjusted for inflation). If the employee earns less than this threshold, the non-compete agreement is not legally enforceable. This provision is based on Washington state law (RCW 49.62.020), and any conflicting terms in the Franchise Agreement are void and unenforceable in Washington.
This information is crucial for prospective Annex Brands franchisees in Washington because it directly impacts their ability to protect their business interests through non-compete agreements. Franchisees need to be aware of this earnings threshold when drafting employment agreements and understand that non-competes are only enforceable against higher-earning employees. It is also important to note that the $100,000 threshold is subject to annual adjustments for inflation, so franchisees must stay informed about the current applicable amount.