Will the minimum annualized earnings threshold for noncompetition covenants related to Big Apple Bagels franchisees in Washington be adjusted annually?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
-
- In the event of a conflict of laws, the provisions of the Washington Franchise Investment Protection Act, Chapter 19.100 RCW shall prevail.
-
- A release or waiver of rights executed by a franchisee shall not include rights under the Washington Franchise Investment Protection Act or any rule or order thereunder 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, rights or remedies under the Act such as a right to a jury trial, may not be enforceable.
-
- Transfer fees are collectable to the
Source: Item 23 — RECEIPTS (FDD pages 87–319)
What This Means (2025 FDD)
According to the 2025 Big Apple Bagels FDD, the minimum annualized earnings threshold related to noncompetition covenants for employees and independent contractors of Big Apple Bagels franchisees in Washington will be adjusted annually for inflation. Specifically, for an employee of a Big Apple Bagels franchisee, a noncompetition covenant is void and unenforceable if their annualized earnings from the party seeking enforcement do not exceed $100,000 per year. For an independent contractor of a Big Apple Bagels franchisee, the noncompetition covenant is void and unenforceable if their annualized earnings from the party seeking enforcement do not exceed $250,000 per year. These amounts are subject to annual adjustments for inflation.
This means that Big Apple Bagels franchisees in Washington must be aware of these earnings thresholds when implementing noncompetition agreements with their employees or independent contractors. If an employee or contractor earns less than the specified amounts (as adjusted for inflation each year), the noncompetition covenant will not be legally enforceable. This is a significant consideration for franchisees in managing their workforce and protecting their business interests.
The inclusion of these stipulations in the FDD reflects Washington state law (RCW 49.62.020 and RCW 49.62.030) and ensures that the Big Apple Bagels franchise agreement complies with these regulations. Franchisees should consult with legal counsel to ensure their noncompetition agreements are structured in accordance with current Washington law and to understand the implications of these regulations for their specific circumstances.
Prospective Big Apple Bagels franchisees should carefully review Exhibit R to the Franchise Disclosure Document, which outlines these specific requirements for Washington State. They should also stay informed about any changes to Washington state law that may affect the enforceability of noncompetition covenants. Understanding these legal requirements is crucial for operating a Big Apple Bagels franchise in Washington and managing relationships with employees and independent contractors effectively.