What happens to provisions in the Cool Binz franchise agreement that conflict with the limitations on noncompetition covenants in Washington?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
he Washington Franchise Investment Protection Act or any rule or order thereunder except when executed pursuant to a negotiated 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). In addition, a noncompetition covenant is void and unenforceable against an independent contractor of a franchisee under RCW 49.62.030 unless the independent contractor's earnings from the party seeking enforcement, when annualized, exc
Source: Item 23 — RECEIPTS (FDD pages 63–238)
What This Means (2025 FDD)
According to Cool Binz's 2025 Franchise Disclosure Document, any provisions within the franchise agreement that clash with Washington state's limitations on noncompetition covenants are considered void and unenforceable in Washington. This stems from the regulations outlined in RCW 49.62.020 and RCW 49.62.030, which place specific earning thresholds on the enforceability of noncompetition covenants for employees and independent contractors.
Specifically, a noncompetition covenant is unenforceable against an employee of a Cool Binz franchisee if their annualized earnings are below $100,000, a figure that is adjusted annually for inflation. Similarly, such a covenant cannot be enforced against an independent contractor of a Cool Binz franchisee unless their annualized earnings exceed $250,000, also subject to annual inflation adjustments.
Furthermore, RCW 49.62.060 prohibits Cool Binz from restricting a franchisee from soliciting or hiring employees of either another Cool Binz franchisee or Cool Binz itself. Any clauses within the franchise agreement that attempt to impose such restrictions are also void and unenforceable in Washington. This ensures that Cool Binz franchisees operating in Washington are not unduly restricted by non-compete clauses that do not comply with state law, and that they have the freedom to hire employees from within the Cool Binz network.