How often is the earnings threshold adjusted for non-competition covenants related to Bonchon franchises 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, the earnings thresholds related to non-competition covenants in Washington State are adjusted annually for inflation. Specifically, for an employee of a Bonchon franchisee, a noncompetition covenant is unenforceable if their annualized earnings do not exceed $100,000. For an independent contractor of a franchisee, the noncompetition covenant is unenforceable if their annualized earnings do not exceed $250,000. These amounts are subject to annual adjustments for inflation.
This means that Bonchon franchisees in Washington need to be aware of these annually adjusted income thresholds when implementing non-compete agreements with their employees and independent contractors. If an employee or contractor earns less than the adjusted threshold, the non-compete agreement will not be legally enforceable.
This provision is particularly important for Bonchon franchisees in Washington as it directly impacts their ability to restrict former employees or contractors from working for competitors. Franchisees must stay informed about the updated earnings thresholds each year to ensure their non-compete agreements are valid and enforceable. This also highlights the importance of seeking legal counsel to ensure compliance with Washington state law regarding non-competition covenants.