Will the minimum annualized earnings threshold for noncompetition covenants for Bombs Away franchisee employees in Washington be adjusted?
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, the minimum annualized earnings threshold for noncompetition covenants for employees in Washington will be adjusted annually for inflation. Specifically, a noncompetition covenant is unenforceable against an employee of a Bombs Away franchisee if the employee's annualized earnings from the franchisee do not exceed $100,000 per year. This amount is subject to annual adjustments for inflation.
Similarly, a noncompetition covenant is unenforceable against an independent contractor of a Bombs Away franchisee if their annualized earnings from the franchisee do not exceed $250,000 per year, which is also adjusted annually for inflation. This means that Bombs Away franchisees in Washington must be aware of these earnings thresholds and how they change each year to ensure their noncompetition agreements are enforceable.
Bombs Away franchisees should consult with legal counsel to ensure their noncompetition agreements comply with Washington law and to stay informed about the annual adjustments to these earnings thresholds. This is particularly important because any provisions in the franchise agreement or other documents that conflict with these limitations are void and unenforceable in Washington.