What is the minimum annualized earnings threshold 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
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.
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- Transfer fees are collectable to the extent that they reflect the Franchisor's reasonable estimated or actual costs in effecting a 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 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, in Washington, a noncompetition covenant is void and unenforceable against an employee of a Cool Binz franchisee if the employee's annualized earnings from the party seeking enforcement do not 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 $100,000 annually (adjusted for inflation). If the employee earns less than this threshold, the non-compete agreement is not legally enforceable. This protects lower-earning employees from being unduly restricted in their future employment opportunities.
Cool Binz also cannot restrict a franchisee from soliciting or hiring any employee of another Cool Binz franchisee or any employee of Cool Binz itself. Any provisions in the franchise agreement that conflict with these limitations are void and unenforceable in Washington.