What is the effect of RCW 49.62.060 on the Boulder Designs Franchise Agreement in Washington?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
by Franchisee may not include rights under the Washington Franchise Investment Protection Act or any rule or order thereunder except when executed pursuant to a negotiated settlement after the agreement is in effect and where the parties are represented by independent counsel. Provisions such as those
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to the 2025 Boulder Designs Franchise Disclosure Document, RCW 49.62.060 addresses noncompetition covenants and their enforceability in Washington state. Specifically, a noncompetition covenant is considered void and unenforceable against an employee of a Boulder Designs franchisee unless the employee's annualized earnings from the franchisee exceed $100,000 per year. This earnings threshold is subject to annual adjustments for inflation.
This statute directly impacts the ability of a Boulder Designs franchisee in Washington to enforce non-compete agreements with their employees. If an employee's earnings are below the specified threshold, the franchisee cannot legally prevent that employee from working for a competitor or starting a competing business, even after their employment with the Boulder Designs franchise ends. This could pose a risk to the franchisee if a valuable employee leaves to join a competitor, potentially taking with them knowledge and experience gained while working for the Boulder Designs business.
For a prospective Boulder Designs franchisee in Washington, it's crucial to understand this limitation on non-compete agreements. Franchisees should consider the potential implications for employee retention and the protection of confidential business information. They may need to explore alternative strategies, such as offering competitive compensation and benefits packages, to retain valuable employees and mitigate the risk of competition from former employees. Additionally, franchisees should stay informed about any annual adjustments to the earnings threshold that could affect the enforceability of their non-compete agreements.