In Washington, what is the minimum annualized earnings threshold for an independent contractor of a Bft franchisee for a noncompetition covenant to be enforceable?
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 the state of Washington, a noncompetition covenant is void and unenforceable against an independent contractor of a Bft franchisee 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 based on RCW 49.62.030.
This means that if a Bft franchisee in Washington wants to enforce a non-compete agreement against an independent contractor, the contractor must be earning more than $250,000 annually. If the contractor earns less than this amount, the non-compete agreement is not legally enforceable. This threshold protects lower-earning independent contractors from being unduly restricted in their ability to work for others.
This provision is important for prospective Bft franchisees in Washington to understand, as it limits their ability to restrict the future employment of independent contractors who earn less than the specified amount. Franchisees should be aware of this limitation when drafting agreements with independent contractors and consider the potential implications for their business operations. It is also important to note that the $250,000 threshold is subject to annual adjustments for inflation, so franchisees need to stay informed about the current applicable threshold.