What happens to provisions in the Chesters franchise agreement that conflict with the limitations on noncompetition covenants?

According to Chesters's 2025 Franchise Disclosure Document, any part of the franchise agreement that clashes with the limitations on noncompetition covenants is considered void and unenforceable specifically in Washington state. This means that if a clause in the agreement attempts to impose noncompetition restrictions that do not align with Washington's legal stipulations, that clause will not be legally valid within Washington.

Washington state law, specifically RCW 49.62.020, dictates that noncompetition covenants are unenforceable against an employee of a Chesters franchisee unless the employee's annualized earnings exceed $100,000, a figure that is adjusted annually for inflation. Similarly, RCW 49.62.030 states that noncompetition covenants are unenforceable against an independent contractor of a franchisee if their annualized earnings are below $250,000, also adjusted for inflation each year.

This protection extends to franchisees and their employees or independent contractors, ensuring that Chesters cannot enforce non-compete agreements that are more restrictive than what Washington law allows. This addendum provides clarity and protection for franchisees operating in Washington, ensuring that the state's franchise laws take precedence over conflicting terms in the standard franchise agreement.