Under the Software License Agreement, does the unenforceability of a noncompetition covenant against an employee of a Bonchon franchisee depend on the employee's earnings from the party?
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 enforceability of a noncompetition covenant against an employee of a Bonchon franchisee is dependent on the employee's earnings. Specifically, pursuant to Washington state law RCW 49.62.020, a noncompetition covenant is void and unenforceable against an employee of a franchisee if the employee's annualized earnings from the party seeking enforcement exceed $100,000 per year. This amount is subject to annual adjustments for inflation.
This provision directly impacts Bonchon franchisees in Washington, as it sets a clear threshold for when a noncompetition agreement with an employee can be legally enforced. If an employee's earnings are below the specified amount, the noncompetition covenant is unenforceable. This ensures that lower-earning employees are not unduly restricted in their future employment opportunities.
Furthermore, the FDD states that any provisions within the franchise agreement or elsewhere that conflict with these limitations are void and unenforceable in Washington. This reinforces the primacy of Washington state law in governing the enforceability of noncompetition covenants within the Bonchon franchise system. Bonchon franchisees should be aware of this earnings threshold and ensure their employment agreements comply with these legal requirements to avoid potential legal challenges.