In Washington, what is the minimum annualized earnings threshold for an independent contractor 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 the state of Washington, a noncompetition covenant is unenforceable against an independent contractor of an Annex Brands franchisee if the independent contractor's earnings from the party seeking enforcement, when annualized, do not exceed $250,000 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 independent contractor, they must ensure that the contractor's annualized earnings are above this threshold. If the earnings are below $250,000 (adjusted for inflation), the non-compete agreement is void and unenforceable under Washington law.
This provision protects independent contractors from being unduly restricted in their ability to work after their engagement with an Annex Brands franchise ends. It also highlights the importance of understanding state-specific laws regarding non-competition agreements, as they can significantly impact the enforceability of such agreements. Annex Brands franchisees in Washington must be aware of this earnings threshold to ensure that any non-compete agreements with independent contractors are legally sound.