What happens to provisions in the Bambu franchise agreement that conflict with limitations on noncompetition covenants in Washington?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
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Transfer fees are collectable to the extent that they reflect the franchisor's reasonable estimated or actual costs in effecting 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 unenforceable in Washington.
RCW 49.62.060 prohibits a franchisor from restricting, restraining, or prohibiting a franchisee from (i) soliciting or hiring any employee of a franchisee of the same franchisor or (ii) soliciting or hiring any empl
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, any provisions within the franchise agreement that conflict with Washington state law regarding noncompetition covenants are void and unenforceable in Washington. This primarily relates to RCW 49.62.020 and RCW 49.62.060. RCW 49.62.020 states that 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 adjusted annually for inflation. Additionally, a noncompetition covenant is void and unenforceable against an independent contractor of a franchisee unless their earnings exceed $250,000 per year, also adjusted for inflation. RCW 49.62.060 prohibits Bambu from restricting a franchisee from soliciting or hiring any employee of another Bambu franchisee or any employee of Bambu itself.
For a prospective Bambu franchisee in Washington, this means that the standard non-compete clauses in the franchise agreement have specific limitations. Bambu cannot enforce non-competition agreements against employees or independent contractors who earn less than the specified thresholds ($100,000 for employees and $250,000 for independent contractors, both subject to annual inflation adjustments). Furthermore, Bambu cannot prevent a franchisee from hiring employees from other Bambu locations or from Bambu itself.
This protection is further reinforced by the Washington Rider to the Franchise Agreement, which explicitly states that any conflicting provisions are void and unenforceable. This ensures that franchisees operating in Washington are not unduly restricted in their hiring practices and that their employees and contractors are not subject to unenforceable non-compete agreements if their income falls below the state-mandated levels. This aspect is particularly important for managing labor costs and maintaining operational flexibility within the franchise.
It is important to note that Bambu states within the agreement that they do not agree with the above language and believe that each of the provisions of the Agreement, including all choice of law provisions, are fully enforceable. Bambu states that they intend to fully enforce all of the provisions of the agreement. However, the Washington Rider to the Franchise Agreement takes precedence.