For a Circle K franchise in Washington, what happens to the independent contractor 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 the state of Washington, a noncompetition covenant is unenforceable against an independent contractor of a Circle K franchisee if their earnings from the party seeking enforcement, when annualized, do not exceed $250,000 per year. This threshold is subject to annual adjustments for inflation. This means that the $250,000 threshold will increase each year based on inflation.
For a prospective Circle K franchisee in Washington, this is an important consideration when hiring independent contractors. If a franchisee wants to enforce a non-compete agreement against an independent contractor, they need to ensure that the contractor's earnings meet the annually adjusted threshold. Failure to do so would render the non-compete agreement void and unenforceable.
This provision is specific to Washington State due to RCW 49.62.030, and Circle K notes that any conflicting provisions in the franchise agreement are void and unenforceable in Washington. Franchisees should consult with legal counsel to ensure their independent contractor agreements comply with Washington law and to understand the implications of the annually adjusted earnings threshold.