What is the minimum annualized earnings threshold for a Buff City Soap franchisee's employee for a noncompetition covenant to be enforceable in Washington?
Buff_City_Soap Franchise · 2025 FDDAnswer from 2025 FDD Document
imated or actual costs in effecting a transfer. 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 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 with these limit
Source: Item 6 — , Securities Offering Fee, in the amount column is revised to state the following: (FDD pages 216–303)
What This Means (2025 FDD)
According to the 2025 Buff City Soap Franchise Disclosure Document, a noncompetition covenant is void and unenforceable against an employee of a Buff City Soap franchisee in Washington unless the employee's earnings from the party seeking enforcement, when annualized, exceed $100,000 per year. This amount will be adjusted annually for inflation. This protection is codified under RCW 49.62.020.
This means that if a Buff City Soap franchisee in Washington wants to enforce a non-compete agreement against an employee, that employee must be earning at least $100,000 annually (adjusted for inflation). If the employee earns less than this threshold, the non-compete agreement is not legally enforceable. This provision aims to protect lower-earning employees from being unduly restricted in their future employment opportunities.
For a Buff City Soap franchisee, this information is crucial for understanding the limitations on non-competition agreements with their employees in Washington. They need to be aware of the earnings threshold and how it affects their ability to enforce such agreements. It is also important to stay updated on the annual inflation adjustments to this threshold to ensure compliance with Washington law. This requirement does not apply to independent contractors, who have a higher earnings threshold of $250,000.