What earnings threshold must an independent contractor of an Atwell Suites licensee exceed for a noncompetition covenant to be enforceable?
Atwell_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
. RCW 19.100.190 permits franchisees to seek treble damages under certain circumstances. Accordingly, Section 13(B)(3) of the License and provisions contained elsewhere in the License requiring licensees to waive exemplary, punitive, or similar damages shall not apply to licensees seeking treble damages under RCW 19.100.190, except when executed pursuant to a negotiated settlement after the agreement is in effect and where the parties are represented by independent
Source: Item 23 — Receipts (FDD pages 99–486)
What This Means (2025 FDD)
According to Atwell Suites' 2025 Franchise Disclosure Document, specifically the Washington Amendment, a noncompetition covenant is void and unenforceable against an independent contractor of an Atwell Suites licensee unless the independent contractor's earnings from the party seeking enforcement, when annualized, exceed $250,000 per year. This amount will be adjusted annually for inflation. This stipulation is pursuant to RCW 49.62.030.
This means that in Washington state, Atwell Suites cannot enforce a non-compete agreement against an independent contractor working for one of its franchisees if that contractor earns less than $250,000 annually. The purpose of this law is to protect lower-income independent contractors from being unfairly restricted in their ability to find work after their engagement with the Atwell Suites franchise ends. The annual adjustment for inflation ensures that the earnings threshold keeps pace with the rising cost of living.
For a prospective Atwell Suites franchisee in Washington, this information is crucial for understanding the limitations on non-competition agreements. If you plan to engage independent contractors, you need to be aware that non-compete agreements are only enforceable against those earning above the specified threshold. This may influence your hiring practices and the types of roles you assign to independent contractors. It is important to stay updated on the annually adjusted amount to ensure compliance.
It is important to note that this provision specifically applies in Washington state due to the Washington Franchise Investment Protection Act. Franchisees in other states may be subject to different regulations regarding non-competition covenants for independent contractors. Therefore, it is essential to consult with legal counsel to understand the specific laws in your state.