What is the minimum annualized earnings an independent contractor of a Chesters franchisee must earn for a noncompetition covenant to be enforceable in Washington?
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, in Washington, a noncompetition covenant is only enforceable against an independent contractor of a Chesters franchisee if the independent contractor's annualized earnings from the party seeking enforcement exceed $250,000 per year. This amount will be adjusted annually for inflation.
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. If the contractor earns less than this amount, the non-compete agreement is considered void and unenforceable under Washington state law.
This provision protects independent contractors from being unduly restricted in their ability to work for others if their earnings are below a certain threshold. Chesters franchisees in Washington need to be aware of this limitation when drafting and attempting to enforce non-competition agreements with independent contractors. It is important to note that the $250,000 threshold is subject to annual adjustments for inflation, so franchisees should stay informed of the current applicable amount.