What are the annual earnings thresholds that make a noncompetition covenant void and unenforceable against an employee or independent contractor of a Bonchon franchisee in Washington?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
r into two consecutive Successor Franchise Agreements and the conditions the Franchisee must satisfy in order to have the right to enter into a Successor Franchise Agreement, respectively. The Franchisor will have no obligation upon the termination of the second Successor Franchise Agreement to offer the Franchisee a continued right to operate its Bonchon Business, and the Franchisee may be required at that time to stop operating its restaurant as a Bonchon Restaurant and to comply with all post-termination obligations.
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- 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 annual
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, in Washington state, noncompetition covenants have specific earnings thresholds that determine their enforceability. For an employee of a Bonchon franchisee, a noncompetition covenant is void and unenforceable if their annualized earnings from the party seeking enforcement do not exceed $100,000 per year. This amount is subject to annual adjustments for inflation.
For an independent contractor of a Bonchon franchisee, the threshold is higher. A noncompetition covenant is void and unenforceable if the independent contractor's annualized earnings from the enforcing party do not exceed $250,000 per year, also adjusted annually for inflation. These stipulations are based on Washington state law, specifically RCW 49.62.020 for employees and RCW 49.62.030 for independent contractors.
This means that Bonchon franchisees in Washington cannot enforce non-compete agreements against employees earning less than the adjusted $100,000 or independent contractors earning less than the adjusted $250,000. Any provisions within the franchise agreement or other related documents that conflict with these earnings limitations are considered void and unenforceable in Washington. This ensures that lower-earning workers and contractors are not unduly restricted in their ability to seek other employment or contract opportunities.
Prospective Bonchon franchisees in Washington should be aware of these limitations on noncompetition covenants. They should consult with legal counsel to ensure their employment and contractor agreements comply with Washington state law. This is particularly important when drafting agreements and considering enforcement options, as any attempt to enforce a non-compliant covenant could have legal repercussions.