What is the earnings threshold for an independent contractor of a Cool Binz franchisee in Washington, above which a noncompetition covenant may be enforceable?
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 the state of Washington, a noncompetition covenant is void and unenforceable against an independent contractor working for a Cool Binz franchisee unless the independent contractor's earnings, when annualized, exceed $250,000 per year. This amount will be adjusted annually for inflation.
This regulation, as stated in the FDD, means that Cool Binz franchisees in Washington cannot enforce non-compete agreements against their independent contractors if those contractors earn less than $250,000 annually. This protects lower-earning independent contractors from being restricted in their ability to work for other businesses or start their own competing businesses.
For a prospective Cool Binz franchisee in Washington, this information is crucial for understanding the limitations on non-competition agreements. If you plan to hire independent contractors, be aware that non-competes are only enforceable above the specified earnings threshold, which adjusts for inflation each year. Any conflicting provisions in the franchise agreement are void and unenforceable in Washington.