What is the annual earnings threshold for a Churchs Chicken franchisee independent contractor above which a noncompetition covenant may be enforceable in Washington?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
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 against an independent contractor of a franchisee under RCW 49.62.030 unless the independent contractor's earnings from the p
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 50–55)
What This Means (2025 FDD)
According to Churchs Chicken's 2025 Franchise Disclosure Document, a noncompetition covenant in Washington State is void and unenforceable against an independent contractor working for a Churchs Chicken franchisee unless the independent contractor's earnings exceed $250,000 per year, when annualized. This threshold will be adjusted annually for inflation. This stipulation is based on RCW 49.62.030.
This means that if an independent contractor's earnings are at or below $250,000 annually, any agreement preventing them from working for a competing business is not enforceable in Washington State. However, if their earnings exceed this amount, a noncompetition covenant may be enforceable, provided it meets other legal requirements.
This provision protects lower-earning independent contractors from being unduly restricted in their ability to find work after their engagement with a Churchs Chicken franchisee ends. Prospective franchisees in Washington should be aware of this limitation on noncompetition agreements and ensure their contracts comply with state law. It is important to note that the $250,000 threshold is subject to annual adjustments for inflation, so franchisees should stay informed about the current applicable amount.