How does Chapter 49.62 RCW potentially impact the non-competition provisions in the Bang Cookies Franchise Agreement?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
either in the State of Washington, or in a place mutually agreed upon at the time of the arbitration or as determined by the arbitrator.
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- In the event of a conflict of laws, the provisions of the Washington Franchise Investment Protection Act, Chapter 19.100 RCW shall prevail.
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- A release or waiver of rights executed by a franchisee shall not include rights under the Washington Franchise Investment Protection Act except when executed pursuant to a negotiated settlement after the agreement is in effect and where the parties are represented by independent counsel. Provisions such as those which unreasonably restrict or limit the statute of limitations period for claims under the Act, rig
Source: Item 23 — RECEIPTS (FDD pages 56–245)
What This Means (2024 FDD)
According to Bang Cookies's 2024 Franchise Disclosure Document, Chapter 49.62 RCW of Washington State law may limit the enforceability of the non-competition provisions outlined in the Bang Cookies Franchise Agreement. This means that certain aspects of the non-compete clauses in the agreement might not be legally valid in Washington State due to this law.
Specifically, Washington law stipulates several conditions that affect non-competition agreements. First, an employee non-compete covenant is unenforceable unless the employee's annual earnings exceed $100,000. Second, there is a legal presumption that any non-compete agreement lasting longer than 18 months is considered unreasonable and unenforceable. Third, Bang Cookies, as a franchisor, is prohibited from restricting a franchisee from soliciting or hiring any employee of the franchisor or another franchisee within the Bang Cookies system. Finally, any contractual requirement forcing an employee to resolve a non-competition covenant outside of Washington State is void and unenforceable.
For a prospective Bang Cookies franchisee in Washington, this amendment offers some protection against overly restrictive non-compete terms. It ensures that the franchisee's ability to hire employees from within the Bang Cookies network cannot be restricted. It also provides a legal basis to challenge non-compete agreements that are longer than 18 months or that apply to employees earning less than $100,000 annually. This amendment aims to align the Bang Cookies Franchise Agreement with Washington State law, providing a fairer balance between the franchisor's interests and the franchisee's rights.