What is the minimum annualized earnings threshold for a noncompetition covenant to be enforceable against an independent contractor of a Casiola franchisee in Washington?
Casiola Franchise · 2024 FDDAnswer from 2024 FDD Document
ation of the Washington Franchise Investment Protection Act, in Washington.
A release or waiver of rights executed by a franchisee may not include rights under the Washington Franchise Investment Protection Act or any rule or order thereunder except when executed pursuant to a negotiated settlement after the agreement is in effect and where the parties are represented by independent counsel. Provisions such as those which unreasonably restrict or limit the statute of limitations period for claims under the Act, or rights or remedies under the Act such 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,
Source: Item 23 — RECEIPTS (FDD pages 47–209)
What This Means (2024 FDD)
According to Casiola's 2024 Franchise Disclosure Document, in Washington, a noncompetition covenant is unenforceable against an independent contractor working for a Casiola franchisee if the independent contractor's annualized earnings from the franchisee are below $250,000. This figure will be adjusted annually for inflation.
This means that if a Casiola franchisee in Washington wants to enforce a non-compete agreement against an independent contractor, the contractor must be earning at least $250,000 per year from that franchise. If the contractor earns less than this amount, the non-compete agreement is void and unenforceable under Washington state law.
This provision protects independent contractors from being unduly restricted in their ability to work for others if their earnings from a Casiola franchise are relatively low. It also means that Casiola franchisees in Washington need to be aware of this earnings threshold when drafting and enforcing non-compete agreements with their independent contractors. They should consult with legal counsel to ensure their agreements comply with Washington law. This requirement is specific to Washington state and may differ in other states where Casiola franchises operate.