What is the minimum annualized earnings threshold for an independent contractor of a Cinnaholic franchisee in Washington for a noncompetition covenant to be enforceable?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
ng 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, a noncompetition covenant applied to an independent contractor working for a Cinnaholic franchisee in Washington is only enforceable if the contractor's annualized earnings exceed a specific threshold. This threshold is set at $250,000 per year. This amount is subject to annual adjustments for inflation, potentially changing the actual earnings level required for enforceability in future years. This regulation is pursuant to RCW 49.62.030.
This means that if a Cinnaholic 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 (adjusted for inflation). If the contractor's earnings are below this threshold, the non-compete agreement is considered void and unenforceable under Washington state law. This protects lower-earning independent contractors from being unduly restricted in their ability to work for competitors after their engagement with the Cinnaholic franchise ends.
For a prospective Cinnaholic franchisee in Washington, this information is crucial for understanding the limitations on non-competition agreements. It highlights the importance of structuring agreements with independent contractors in compliance with Washington state law. Franchisees should consult with legal counsel to ensure their non-competition agreements are enforceable and to stay updated on any inflation adjustments to the earnings threshold. This also affects the franchisee's ability to protect their business interests and confidential information through non-compete clauses with independent contractors, as the enforceability is directly tied to the contractor's income level.