In Washington, does the annual earnings threshold for non-competition covenants for Boulder Designs franchisees' independent contractors get adjusted for inflation?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
reasonable estimated or actual costs in effecting a transfer.
Pursuant to RW 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 annualized, exceed $100,000 per year (an amount that will be adjusted annually for inflation). In addition, a noncompetition covenant is void and unenforceable against an independent contractor of a franchisee under RCW 49.62.030 unless the independent contractor's earnings from the party seeking enforcement, when annualized, exceed $250,000 per year (an amount that will be adjusted annually for inflation). As a result, any provisions contained in the franchise agreement or elsewhere that conflict wi
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 38–44)
What This Means (2025 FDD)
According to Boulder Designs' 2025 Franchise Disclosure Document, in Washington, non-competition covenants for independent contractors of a Boulder Designs franchisee are subject to certain earnings thresholds. Specifically, under RCW 49.62.030, a non-competition covenant is void and unenforceable against an independent contractor if their annualized earnings from the party seeking enforcement do not exceed $250,000 per year.
Importantly, this $250,000 threshold is adjusted annually for inflation. This means the actual earnings limit above which a non-compete agreement can be enforced will increase each year to account for changes in the cost of living. This adjustment protects independent contractors from being held to non-compete agreements if their earnings, when adjusted for inflation, fall below the current threshold.
This provision is significant for prospective Boulder Designs franchisees in Washington because it limits their ability to enforce non-competition agreements against independent contractors who earn less than the inflation-adjusted threshold. Any conflicting provisions in the franchise agreement or other documents are void and unenforceable in Washington, ensuring that the state law prevails.