What is the effect of Washington's noncompetition covenant limitations on conflicting provisions in the Buns On Fire franchise agreement?
Buns_On_Fire Franchise · 2025 FDDAnswer from 2025 FDD Document
enewal of your franchise.
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- In the event of a conflict of laws, the provisions of the Washington Franchise Investment Protection Act, Chapter 19.100 RCW will prevail.
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- Transfer fees are collectable to the extent that they reflect the Franchisor's reasonable estimated or actual costs in effecting a transfer.
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- Section 4.01 of the Franchisee Agreement shall be amended to add the following language:
- "In lieu of an impound of franchise fees, the Franchisor will not require or accept the payment of any initial franchise fees until the franchisee has (a) received all pre-opening and initial training obligations that it is entitled to under the franchise agreement or offering circular, and (b) is open for business."
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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 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 f
Source: Item 23 — RECEIPTS (FDD pages 49–200)
What This Means (2025 FDD)
According to the 2025 Buns On Fire FDD, Washington state law places limitations on noncompetition covenants, and any provisions within the franchise agreement that conflict with these limitations are considered void and unenforceable in Washington. Specifically, RCW 49.62.020 states that a noncompetition covenant is unenforceable against an employee, including a franchisee's employee, if their annualized earnings from the enforcing party do not exceed $100,000, which is adjusted annually for inflation. Similarly, RCW 49.62.030 makes noncompetition covenants unenforceable against an independent contractor of a franchisee if their annualized earnings from the enforcing party do not exceed $250,000, also adjusted annually for inflation.
This means that Buns On Fire franchisees in Washington are not able to enforce non-compete agreements against their employees or independent contractors who earn less than the specified amounts. The franchisor is also prohibited from restricting franchisees from soliciting or hiring any employee of a franchisee of the same franchisor or any employee of the franchisor.
For a prospective Buns On Fire franchisee in Washington, this addendum provides significant protection for their employees and independent contractors. It prevents the franchisee from unduly restricting the future employment opportunities of lower-earning workers. Franchisees should be aware of these limitations and ensure their employment agreements comply with Washington law. This also means that Buns On Fire franchisees operating in Washington have more freedom to hire employees or contractors who may have previously worked for another Buns On Fire location or for the franchisor itself.