What is the minimum annualized earnings threshold for a Cinnaholic franchisee employee in Washington for a noncompetition covenant to be enforceable?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
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 tha
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 27–35)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, in Washington, a noncompetition covenant is unenforceable against an employee of a Cinnaholic franchisee unless the employee's annualized earnings exceed $100,000 per year. This amount will be adjusted annually for inflation. This means that Cinnaholic franchisees in Washington cannot enforce non-compete agreements against employees who do not meet this earnings threshold.
This provision is based on Washington state law (RCW 49.62.020), which aims to protect employees from overly restrictive non-compete agreements, especially those with lower earnings. The law also extends similar protections to independent contractors, setting a higher earnings threshold of $250,000 per year for non-competition covenants to be enforceable against them.
Cinnaholic franchisees operating in Washington should be aware of these limitations on noncompetition covenants. Any conflicting provisions in the franchise agreement or other related documents are void and unenforceable in Washington. Franchisees should consult with legal counsel to ensure their employment agreements comply with Washington law.