Is failure to comply with non-competition provisions a non-curable default for a Cinnaholic franchisee?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
to reimburse the franchisor for court costs or expenses, including attorneys' fees, such provision applies only if the franchisor is the prevailing party in any judicial or arbitration proceeding.
- 14. Noncompetition Covenants. 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 party seeking enforcement, when annualized, exceed $250,000 per year (an amount that will be adjusted annually for inflation). As a result, any provision contained in the franchise agreement or elsewhere that conflicts with these limitations is void and unenforceable in Washington.
- 15. Nonsolicitation Agreements. RCW 49.62.060 prohibits a franchisor from restricting, restraining, or prohibiting a franchisee from (i) soliciting or hiring any employee of a franchisee of the same franchisor or (ii) soliciting or hiring any employee of the franchisor. As a result, any such provisions contained in the franchise agreement or elsewhere are void and unenforceable in Washington.
- 16. Questionnaires and Acknowledgments. No statement, questionnaire, or acknowledgment signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving an
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP (FDD pages 42–50)
What This Means (2025 FDD)
Based on the 2025 Cinnaholic Franchise Disclosure Document, whether failure to comply with non-competition provisions constitutes a non-curable default is not explicitly addressed. However, the FDD includes addenda for several states (California, Maryland, Minnesota, Illinois, New York, and Virginia) that modify the franchise agreement to comply with state-specific laws. These addenda primarily concern financial assurances, waivers of rights, and governing law, but they do not specify whether a violation of non-competition clauses is a non-curable default.
In Washington state, the FDD states that noncompetition covenants are void and unenforceable against an employee of a Cinnaholic franchisee unless the employee's earnings exceed $100,000 per year (adjusted annually for inflation) or $250,000 for independent contractors. Similarly, nonsolicitation agreements that restrict a franchisee from hiring employees of other franchisees or the franchisor are unenforceable.
Since the FDD does not explicitly state whether non-compliance with non-competition agreements is a non-curable default, prospective Cinnaholic franchisees should seek clarification from the franchisor. Specifically, they should inquire about the conditions under which the franchise agreement can be terminated and whether a breach of the non-competition clause allows for immediate termination or if there is a cure period.