In Washington, what is the minimum annualized earnings threshold for a Card My Yard franchisee's employee for a non-competition covenant to be enforceable?
Card_My_Yard Franchise · 2025 FDDAnswer from 2025 FDD Document
on at the time of the arbitration or mediation, or as determined by the arbitrator or mediator at the time of arbitration or mediation. In addition, if litigation is not precluded by the franchise agreement, a franchisee may bring an action or proceeding arising out of or in connection with the sale of franchises, or a violation of the Washington Franchise Investment Protection Act, in Washington.
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- Pursuant to RCW 49.62.020, a non-competition 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).
Source: Item 23 — RECEIPTS (FDD pages 84–259)
What This Means (2025 FDD)
According to Card My Yard's 2025 Franchise Disclosure Document, in the state of Washington, a non-competition covenant is void and unenforceable against a Card My Yard franchisee's employee unless the employee's earnings, when annualized, exceed $100,000 per year. This amount will be adjusted annually for inflation.
Similarly, a non-competition covenant is unenforceable against an independent contractor of a Card My Yard franchisee if their annualized earnings from the franchisee are less than $250,000 per year, also adjusted annually for inflation. These stipulations are in accordance with Washington statutes RCW 49.62.020 and RCW 49.62.030, respectively.
Any provisions within the Card My Yard franchise agreement or related documents that conflict with these earnings thresholds are considered void and unenforceable in Washington. This ensures that Card My Yard franchisees operating in Washington adhere to state law regarding non-competition agreements for their employees and independent contractors.