What condition must be met for a noncompetition covenant to be enforceable against a Chesters franchisee's employee?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
agreements require a franchisee to reimburse the franchisor for court costs or expenses, including attorneys' fees, such provision applies only if the franchisor is the prevailing party in any judicial or arbitration proceeding.
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- Noncompetition Covenants. 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 ye
Source: Item 23 — **RECEIPTS (FDD pages 48–197)
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, a noncompetition covenant is only enforceable against a franchisee's employee if the employee's annualized earnings from the party seeking enforcement exceed $100,000 per year. This amount will be adjusted annually for inflation. This stipulation is based on Washington state law (RCW 49.62.020).
This means that if a Chesters franchisee in Washington wants to enforce a non-compete agreement against an employee, that employee must be earning more than $100,000 annually (adjusted for inflation). If the employee earns less than this threshold, the non-compete agreement is void and unenforceable. This protects lower-earning employees from being unduly restricted in their future employment opportunities.
Chesters franchisees operating in Washington should be aware of this legal limitation when drafting and attempting to enforce non-competition agreements with their employees. Any provision in the franchise agreement or other related documents that conflicts with these earnings limitations is void and unenforceable in Washington. This ensures compliance with state law and protects the rights of employees working for Chesters franchisees.