For C12 Group franchises in Washington, what is the impact on noncompetition covenants if an independent contractor's earnings do not exceed $250,000 per year?
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, Washington state law impacts the enforceability of noncompetition covenants. Specifically, for C12 Group franchises operating in Washington, a noncompetition covenant is considered void and unenforceable against an independent contractor if their annualized earnings from the C12 Group franchisee do not exceed $250,000. This threshold is subject to annual adjustments for inflation.
This means that C12 Group franchisees in Washington cannot legally enforce a non-compete agreement against an independent contractor whose earnings fall below this threshold. Any provisions within the franchise agreement or other related documents that contradict this limitation are also void and unenforceable in Washington. This protects lower-earning independent contractors from being unduly restricted in their ability to work for other businesses or start their own ventures after leaving a C12 Group franchise.
For a prospective C12 Group franchisee in Washington, this information is crucial for understanding the limitations on non-competition agreements. They must be aware that they cannot prevent independent contractors earning less than $250,000 annually (adjusted for inflation) from competing with their C12 Group business. This could influence decisions about hiring, compensation, and the overall business strategy within the state, as it may be more difficult to retain independent contractors or prevent them from using acquired knowledge to compete if their earnings are below the threshold.