What are the earnings thresholds that determine the enforceability of noncompetition covenants against employees and independent contractors of an Embassy Suites franchisee in Washington?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
ed to provide that transfer fees are collectable to the extent that they reflect Franchisor's reasonable estimated or actual costs in effecting a transfer.
-
- Subsection 16.2.1 is amended to provide that in the event of a conflict of laws, the provisions of the Washington Franchise Investment Protection Act, Chapter 19.100 RCW shall prevail.
-
- Subsection 16.8 is amended to provide that a release or waiver of rights executed by a Franchisee will not include rights under the Act except when executed pursuant to a negotiated settlement after the Franchise Agreement is in effect and where the parties are represented by independent counsel.
-
- Section 16.11 is amended to delete subsections 16.11.1 and 16.11.2.
-
- Subsection 17.1 is amended to provide that provisio
Source: Item 22 — CONTRACTS (FDD page 97)
What This Means (2025 FDD)
According to Embassy Suites's 2025 Franchise Disclosure Document, noncompetition covenants in Washington State have specific earnings thresholds that determine their enforceability. For an employee of an Embassy Suites franchisee, a noncompetition covenant is void and unenforceable if the employee's annualized earnings from the franchisee are $100,000 per year or less. This amount is subject to annual adjustments for inflation.
Similarly, for an independent contractor working with an Embassy Suites franchisee, a noncompetition covenant is unenforceable if their annualized earnings from the franchisee are $250,000 per year or less. This threshold is also adjusted annually to account for inflation.
These regulations, pursuant to RCW 49.62.020 and RCW 49.62.030, protect lower-earning workers and independent contractors from overly restrictive noncompete agreements. As an Embassy Suites franchisee, it's crucial to be aware of these stipulations when drafting or enforcing noncompetition agreements in Washington to ensure compliance with state law. Any provisions conflicting with these limitations are void and unenforceable in Washington.