For a Circle K franchise in Washington, what happens to the employee earnings threshold for non-compete agreements annually?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
egotiated 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.
Transfer fees are collectable to the extent that they reflect the franchisor's reasonable estimated or actual costs in effecting a transfer.
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).
Source: Item 22 — CONTRACTS (FDD page 100)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, in Washington, a noncompetition covenant is unenforceable against an employee of a Circle K franchisee unless the employee's earnings, when annualized, exceed $100,000 per year. This threshold is subject to annual adjustments for inflation. Similarly, a noncompetition covenant is unenforceable against an independent contractor of a Circle K franchisee if their annualized earnings are above $250,000, also adjusted annually for inflation.
This means that Circle K franchisees in Washington cannot enforce non-compete agreements against employees or independent contractors who earn less than these inflation-adjusted thresholds. The annual adjustment for inflation ensures that these income thresholds keep pace with the changing cost of living, protecting lower-earning workers from overly restrictive non-compete agreements.
For a prospective Circle K franchisee, this information is crucial for understanding the limitations on non-compete agreements within their workforce. They must be aware that any provisions in their franchise agreement or other documents that conflict with these earnings thresholds are void and unenforceable in Washington. This could impact their ability to protect their business interests through non-compete agreements with lower-paid staff.