What condition must be met for a noncompetition covenant to be enforceable against an independent contractor of a Chesters franchisee?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
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 enforc
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 an independent contractor of a Chesters franchisee if the independent contractor's earnings from the party seeking enforcement, when annualized, exceed $250,000 per year. This amount will be adjusted annually for inflation. This stipulation is based on RCW 49.62.030, a Washington state law.
This means that if a Chesters franchisee in Washington wants to enforce a non-compete agreement against an independent contractor, they can only do so if that contractor earns more than $250,000 annually (adjusted for inflation). If the contractor earns less than this threshold, the non-compete agreement is considered void and unenforceable under Washington law.
This provision protects lower-earning independent contractors from being unduly restricted in their ability to work for competitors. It also ensures that non-competition agreements are only used in situations where the independent contractor's earnings justify such a restriction. Any conflicting provision in the franchise agreement is void and unenforceable in Washington.