Under what earnings threshold is a noncompetition covenant void and unenforceable against a Bonchon franchisee's employee 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 the state of Washington, a noncompetition covenant is void and unenforceable against a Bonchon franchisee's employee if the employee's annualized earnings from the franchisee are $100,000 per year or less. This figure will be adjusted annually for inflation. This protection is codified in Washington state law under RCW 49.62.020.
This means that Bonchon franchisees in Washington cannot enforce non-compete agreements against employees who earn less than the specified amount. This limitation is designed to protect lower-income workers from being unduly restricted in their ability to find new employment. Any provisions within the franchise agreement or other related documents that conflict with this earnings threshold are considered void and unenforceable in Washington.
For a prospective Bonchon franchisee in Washington, this information is crucial for understanding the limitations on non-competition agreements. They must be aware that non-competes are only enforceable against employees earning above the annually adjusted $100,000 threshold. This could impact hiring and retention strategies, as well as the overall enforceability of restrictive covenants within their business operations. Franchisees should consult with legal counsel to ensure their employment agreements comply with Washington law.