For C12 Group franchises in Washington, will the earnings thresholds for non-competition covenants be adjusted annually?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
as a right to a jury trial, may not be enforceable.
Transfer fees are collectable to the extent that they reflect the franchisor's reasonable estimated 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
Source: Item 23 — RECEIPTS (FDD pages 46–137)
What This Means (2025 FDD)
According to the 2025 C12 Group Franchise Disclosure Document, for franchises purchased in Washington, the earnings thresholds related to non-competition covenants are subject to annual adjustments for inflation. Specifically, a noncompetition covenant is void and unenforceable against an employee of a C12 Group franchisee unless the employee's annualized earnings exceed $100,000 per year. Similarly, a noncompetition covenant is void and unenforceable against an independent contractor of a C12 Group franchisee unless their annualized earnings exceed $250,000 per year. Both of these earnings amounts will be adjusted annually for inflation.
This means that the specific income level at which a non-compete agreement becomes enforceable may change each year based on inflation rates. C12 Group's franchise agreement or other related documents cannot override these limitations, ensuring compliance with Washington state law.
For a prospective C12 Group franchisee in Washington, this provides some protection for their employees and independent contractors, as non-competition agreements are only enforceable if the earnings thresholds are met and adjusted annually. This could impact hiring and contracting strategies, as well as the overall enforceability of non-compete agreements within the franchise operation.