What happens to provisions in the Budget franchise agreement that conflict with RCW 49.62.020 or RCW 49.62.030 in Washington?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
l pre-opening obligations and until Franchisee's Franchised Business is open to the public.
In the event of a conflict of laws, the provisions of the Washington Franchise Investment Protection Act, Chapter 19.100 RCW will prevail.
RCW 19.100.180 may supersede the franchise agreement in your relationship with the franchisor including the areas of termination and renewal of your franchise. There may also be court decisions which may supersede the franchise agreement in your relationship with the franchisor including the areas of termination and renewal of your franchise.
In any arbitration or mediation involving a franchise purchased in Washington, the arbitration or mediation site will be either in the state of Washington, or in a place mutually agreed upon at the time
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, any provisions within the franchise agreement that conflict with Washington state laws RCW 49.62.020 and RCW 49.62.030 are considered void and unenforceable in Washington. These statutes relate to non-competition covenants.
Specifically, RCW 49.62.020 states that a noncompetition covenant is void and unenforceable against an employee of a Budget franchisee unless the employee's earnings, when annualized, exceed $100,000 per year, which is adjusted annually for inflation. Similarly, RCW 49.62.030 states that a noncompetition covenant is void and unenforceable against an independent contractor of a Budget franchisee unless their annualized earnings exceed $250,000 per year, also adjusted for inflation.
This means that Budget cannot enforce non-compete agreements against franchisee employees earning less than $100,000 annually or against independent contractors earning less than $250,000 annually in Washington state. This protects lower-earning workers from being unduly restricted by non-compete clauses, ensuring they can seek other employment opportunities without legal repercussions, and it also allows Budget franchisees to hire qualified workers without the restrictions of non-compete agreements that do not meet the state's earning thresholds.