What is the annualized earnings threshold for an employee of a Cool Binz franchisee in Washington, above which a noncompetition covenant may be enforceable?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
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).
As a result, any provisions contained in the franchise agreement or elsewhere that conflict with these limitations are void and unenforceable in Washington.
Source: Item 23 — RECEIPTS (FDD pages 63–238)
What This Means (2025 FDD)
According to Cool Binz's 2025 Franchise Disclosure Document, in the state of Washington, a noncompetition covenant is only enforceable against an employee of a Cool Binz franchisee if the employee's annualized earnings exceed $100,000. This threshold is subject to annual adjustments for inflation. This rule is based on Washington state law (RCW 49.62.020).
This means that if a Cool Binz franchisee in Washington wants to enforce a non-compete agreement against an employee, that employee must be earning more than the annually adjusted $100,000 threshold. If the employee earns less than this amount, the non-compete agreement is considered void and unenforceable under Washington law. This protects lower-earning employees from being unduly restricted in their future employment opportunities.
Cool Binz franchisees in Washington should be aware of this earnings threshold and how it impacts their ability to use non-competition agreements with their employees. They should also stay informed about the annual inflation adjustments to this threshold to ensure their non-compete agreements are enforceable. Any provisions in the Cool Binz franchise agreement that conflict with these limitations are void and unenforceable in Washington.