In Washington, what is the minimum annualized earnings threshold for a Chem Dry franchisee employee for a noncompetition covenant to be enforceable?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
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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 be adjusted annually for inflation). As a res
Source: Item 23 — Receipts (FDD pages 68–264)
What This Means (2024 FDD)
According to Chem Dry's 2024 Franchise Disclosure Document, in the state of Washington, a noncompetition covenant is void and unenforceable against a Chem Dry franchisee's employee unless the employee's earnings from the party seeking enforcement, when annualized, exceed $100,000 per year. This amount will be adjusted annually for inflation.
Additionally, a noncompetition covenant is void and unenforceable against an independent contractor of a Chem Dry franchisee unless the independent contractor's earnings from the party seeking enforcement, when annualized, exceed $250,000 per year, with annual adjustments for inflation.
These stipulations are based on Washington state law, specifically RCW 49.62.020 and RCW 49.62.030, and any conflicting provisions in the franchise agreement or other documents are void and unenforceable in Washington. This means that Chem Dry franchisees in Washington cannot enforce non-compete agreements against their employees or independent contractors if they do not meet the specified earnings thresholds.