In Washington, what is the minimum annualized earnings threshold for a franchisee employee for a noncompetition covenant to be enforceable by Bft?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
e statute of limitations period for claims under the Act, or rights or remedies under the Act such as a right to a jury trial, may not be enforceable.
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
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 57–66)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, in Washington, a noncompetition covenant is unenforceable against a franchisee's employee if the employee's annualized earnings from the party seeking enforcement do not exceed $100,000 per year. This amount will be adjusted annually for inflation.
This means that Bft franchisees in Washington cannot enforce non-compete agreements against their employees unless those employees earn more than $100,000 annually (adjusted for inflation). This limitation is based on Washington state law (RCW 49.62.020) and applies regardless of what the franchise agreement might state. Any conflicting provisions in the franchise agreement are void and unenforceable in Washington.
For a prospective Bft franchisee in Washington, this is an important consideration when hiring and managing employees. If a franchisee wants to ensure that a non-compete agreement is enforceable, they must ensure that the employee's annualized earnings meet the specified threshold. This could impact hiring decisions, compensation structures, and overall business strategy within the state. Franchisees should consult with legal counsel to ensure compliance with Washington's non-competition laws and to understand the implications for their specific circumstances.