Does the statement regarding noncompetition covenants in RCW 49.62.020 apply to all Bonchon employees, including those working for a franchisee?
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, RCW 49.62.020 addresses the enforceability of noncompetition covenants for employees, including those working for a Bonchon franchisee. Specifically, a noncompetition covenant is considered void and unenforceable against an employee of a franchisee unless their annualized earnings from the party seeking enforcement exceed $100,000 per year. This amount will be adjusted annually for inflation.
For independent contractors of a Bonchon franchisee, RCW 49.62.030 states that a noncompetition covenant is void and unenforceable unless the independent contractor's earnings from the enforcing party exceed $250,000 per year, also adjusted annually for inflation. This means that Bonchon franchisees operating in Washington cannot enforce non-compete agreements against their employees or independent contractors if their earnings fall below these thresholds.
This provision is significant for prospective Bonchon franchisees in Washington because it limits their ability to restrict former employees or contractors from working for competitors if their income is below the specified levels. The FDD explicitly states that any conflicting provisions within the franchise agreement or elsewhere are void and unenforceable in Washington, reinforcing the importance of adhering to these legal requirements. Franchisees should be aware of these limitations when drafting employment agreements and understand that these income thresholds are subject to annual adjustments for inflation.