In Washington, what is the minimum annual earnings threshold for a Chop5 Salad Kitchen franchisee's employee for a noncompetition covenant to be enforceable?
Chop5_Salad_Kitchen Franchise · 2024 FDDAnswer from 2024 FDD Document
violation of the Washington Franchise Investment Protection Act, in Washington.
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- A release or waiver of rights executed by a franchisee may not include rights under the Washington Franchise Investment Protection Act or any rule or order thereunder except when executed pursuant to a negotiated settlement after the agreement is in effect and where the parties are represented by independent counsel. Provisions such as those which unreasonably restrict or limit the statute of limitations period for claims under the Act, or rights or remedies under the Act such as a right to a jury trial, may not be enforceable.
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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.
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- 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 again
Source: Item 23 — RECEIPT (FDD pages 50–178)
What This Means (2024 FDD)
According to the 2024 Chop5 Salad Kitchen Franchise Disclosure Document, in Washington, a noncompetition covenant is void and unenforceable against an employee of a Chop5 Salad Kitchen franchisee unless the employee's earnings from the party seeking enforcement, when annualized, exceed $100,000 per year. This amount is subject to annual adjustments for inflation.
This means that if a Chop5 Salad Kitchen franchisee in Washington wants to enforce a non-compete agreement against an employee, that employee must earn more than $100,000 annually (adjusted for inflation). If the employee earns less than this threshold, the non-compete agreement is not legally enforceable. This provision is based on Washington state law (RCW 49.62.020), and any conflicting terms in the franchise agreement are void in Washington.
Additionally, the FDD states that a similar rule applies to independent contractors of a Chop5 Salad Kitchen franchisee in Washington. For an independent contractor, the earnings threshold is higher, at $250,000 per year (also adjusted annually for inflation), as per RCW 49.62.030. The FDD also specifies that Chop5 Salad Kitchen cannot restrict a franchisee from hiring or soliciting employees of another Chop5 Salad Kitchen franchisee or Chop5 Salad Kitchen itself, according to RCW 49.62.060.