What is the minimum annualized earnings threshold for an independent contractor of a Bombs Away franchisee in Washington for a noncompetition covenant to be enforceable?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
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, or rights or remedies under the Act such as a right to a jury trial, may not be enforceable.
Transfer fees are collectable if they reflect 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 adjust
Source: Item 23 — RECEIPTS (FDD pages 36–117)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, a noncompetition covenant applied to an independent contractor working for a Bombs Away franchisee in Washington is only enforceable if the independent contractor's annualized earnings from the franchisee exceed $250,000 per year. This amount will be adjusted annually for inflation. This is based on Washington state law RCW 49.62.030. Any conflicting provisions in the franchise agreement are void and unenforceable in Washington.
This means that if a Bombs Away franchisee in Washington wants to enforce a non-compete agreement against an independent contractor, they can only do so if that contractor earns more than $250,000 annually from the franchise. The inflation adjustment ensures that this threshold keeps pace with economic changes over time.
For a prospective Bombs Away franchisee in Washington, this is an important consideration when hiring independent contractors and drafting agreements. It highlights the need to ensure that any non-compete clauses comply with Washington state law to be enforceable. Franchisees should consult with legal counsel to ensure their agreements are compliant and enforceable, especially concerning independent contractors earning above this threshold.