Does Bw Premier Collection require franchisees to use non-competition clauses in agreements with independent contractors?
Bw_Premier_Collection Franchise · 2025 FDDAnswer from 2025 FDD Document
You must adopt and implement all procedures we periodically establish in our business judgment to prevent unauthorized use or disclosure of our proprietary information, including restrictions on disclosure to employees and the use of non-disclosure and non-competition clauses in agreements with employees, agents and independent contractors who have access to the proprietary information.
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 limitations are void and unenforceable in Washington.
Source: Item 15 — Obligation to Participate in the Actual Operation of the Franchise Business (FDD page 40)
What This Means (2025 FDD)
According to Bw Premier Collection's 2025 Franchise Disclosure Document, franchisees must adopt and implement procedures to prevent unauthorized use or disclosure of proprietary information. This includes using non-competition clauses in agreements with independent contractors who have access to the proprietary information.
However, the enforceability of non-competition covenants with independent contractors is subject to certain limitations, particularly in Washington state. Specifically, under RCW 49.62.030, a noncompetition covenant is void and unenforceable against an independent contractor if their annualized earnings from the party seeking enforcement do not exceed $250,000. This amount is adjusted annually for inflation. Therefore, any provisions in the franchise agreement that conflict with these limitations are void and unenforceable in Washington.
In practical terms, Bw Premier Collection franchisees need to be aware of these state-specific regulations regarding non-competition agreements. While Bw Premier Collection encourages the use of non-competition clauses to protect proprietary information, franchisees must ensure that such clauses comply with applicable laws, especially concerning the income thresholds for independent contractors in states like Washington. This means franchisees should consult with legal counsel to draft enforceable agreements and stay updated on any changes to these regulations.