What is the minimum annualized earnings threshold for an independent contractor of a Cool Binz franchisee in Washington for a noncompetition covenant to 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 unenforceable against an independent contractor working for a Cool Binz franchisee if the contractor's annualized earnings from the franchisee are below $250,000. This threshold is subject to annual adjustments for inflation. This stipulation is based on Washington state law (RCW 49.62.030).
This means that if a Cool Binz franchisee in Washington wants to enforce a non-compete agreement against an independent contractor, they can only do so if that contractor earns more than $250,000 annually (adjusted for inflation). If the contractor earns less than this amount, the non-compete agreement is void and unenforceable. This protects lower-earning independent contractors from being unduly restricted in their ability to work for others.
For a prospective Cool Binz franchisee in Washington, this information is crucial for understanding the limitations on non-competition agreements with independent contractors. It ensures compliance with state law and helps in drafting enforceable agreements. Franchisees should consult with legal counsel to ensure their agreements align with these requirements and any subsequent adjustments for inflation.