What is the minimum annualized earnings threshold for a noncompetition covenant to be enforceable against an employee of a Canine Dimensions franchisee in Washington?
Canine_Dimensions Franchise · 2025 FDDAnswer from 2025 FDD Document
re 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 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.
RCW 49.62.060 prohibits a franchisor from restricting, restraining, or prohibiting a franchisee from (i) soliciting or hiring any employee of a franchisee of the same franchisor or (ii) soliciting or hiring any employee of the franchisor
Source: Item 22 — CONTRACTS (FDD page 36)
What This Means (2025 FDD)
According to Canine Dimensions' 2025 Franchise Disclosure Document, a noncompetition covenant is only enforceable against an employee of a Canine Dimensions franchisee in Washington if the employee's annualized earnings exceed $100,000. This threshold is subject to annual adjustments for inflation. This limitation is based on Washington state law (RCW 49.62.020). Any conflicting provisions within the franchise agreement are considered void and unenforceable in Washington.
This information is crucial for prospective Canine Dimensions franchisees in Washington because it clarifies the limitations on non-compete agreements with their employees. Franchisees cannot enforce non-competition covenants against employees who do not meet the minimum earnings threshold. This ensures that lower-earning employees are not unduly restricted in their future employment opportunities.
Furthermore, the FDD specifies that similar restrictions apply to independent contractors, with a higher earnings threshold of $250,000 per year. It also states that Canine Dimensions cannot restrict a franchisee from hiring or soliciting employees of another Canine Dimensions franchisee or the franchisor itself. These stipulations provide additional clarity regarding the scope and limitations of non-competition and non-solicitation agreements within the Canine Dimensions franchise system in Washington.