What is the condition for a noncompetition covenant to be enforceable against an employee of a Cool Binz franchisee in Washington?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
ired by Sections 10.B.8 and 11.C of the Franchise Agreement, does not apply to claims arising under the Franchise Investment Protection Act, chapter 19.100 RCW, or any rules or order adopted thereunder, in accordance with RCW 19.100.220(2).
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- Transfer fees are collectable only to the extent that they compensate the franchisor for expenses directly incurred as a result of transfer .
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- 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 ind
Source: Item 23 — RECEIPTS (FDD pages 63–238)
What This Means (2025 FDD)
According to Cool Binz's 2025 Franchise Disclosure Document, in Washington state, a noncompetition covenant is only enforceable against an employee of a Cool Binz franchisee if the employee's annualized earnings from the party seeking to enforce the covenant exceed $100,000 per year. This amount will be adjusted annually for inflation.
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 specified threshold. If the employee earns less than this amount, the non-compete agreement is considered void and unenforceable under Washington law. This provision aims to protect lower-earning employees from being unduly restricted in their future employment opportunities.
This condition is specific to Washington state due to RCW 49.62.020. The FDD explicitly states that any provisions in the franchise agreement that conflict with these limitations are void and unenforceable in Washington. This highlights the importance of franchisees understanding and complying with state-specific labor laws, which can significantly impact the enforceability of standard franchise agreement terms.
Prospective Cool Binz franchisees in Washington should be aware of this earnings threshold and its implications for their ability to restrict former employees from competing with their business. They should also consult with legal counsel to ensure that their employment agreements comply with Washington law.