Is the $100,000 earnings threshold for noncompetition covenants related to Chatime franchise employees in Washington adjusted for inflation?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
a violation of the Washington Franchise Investment Protection Act, in Washington.
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- A release or waiver of rights executed by a franchisee will not include rights under the Washington Franchise Investment Protection Act or any rule or order thereunder except when executed pursuant to a negotiated settl
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, in the state of Washington, a noncompetition covenant is void and unenforceable against an employee of a Chatime franchisee unless the employee's earnings from the party seeking enforcement, when annualized, exceed $100,000 per year. This amount is subject to annual adjustments for inflation.
This means that Chatime franchisees in Washington cannot enforce non-compete agreements against employees who earn less than $100,000 annually, with that threshold increasing over time to account for inflation. This protects lower-earning employees from being restricted in their future employment opportunities.
For a prospective Chatime franchisee in Washington, this implies that non-compete agreements can only be enforced against higher-earning employees. It is important to understand the implications of this law when drafting employment agreements and considering staffing costs. Franchisees should consult with legal counsel to ensure compliance with Washington state law regarding non-competition covenants.