What is the minimum annualized earnings for an employee of a Cool Binz franchisee for a noncompetition covenant to be enforceable 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 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 amount will be adjusted annually for inflation. This is based on Revised Code of Washington (RCW) 49.62.020. Any provisions within the franchise agreement that conflict with this limitation are void and unenforceable in Washington.
For a Cool Binz franchisee in Washington, this means that they cannot enforce a non-compete agreement against an employee who earns less than the specified amount. If a franchisee attempts to enforce a non-compete against an employee earning less than this threshold, the agreement will be considered void. This protects lower-earning employees from being unduly restricted in their future employment opportunities.
This provision also extends to independent contractors, with a higher earnings threshold of $250,000 per year for non-competition covenants to be enforceable. This distinction highlights the importance of correctly classifying workers as either employees or independent contractors, as different rules apply to each category. Franchisees should consult with legal counsel to ensure compliance with these regulations and to properly draft any non-competition agreements.