Does the $250,000 earnings threshold for non-competition covenants for Fat Shack independent contractors in Washington get adjusted for inflation?

According to Fat Shack's 2025 Franchise Disclosure Document, the $250,000 earnings threshold for non-competition covenants pertaining to independent contractors in Washington is adjusted for inflation. Specifically, in Washington, a noncompetition covenant is void and unenforceable against an independent contractor of a Fat Shack franchisee if the independent contractor's earnings from the party seeking enforcement, when annualized, do not exceed $250,000 per year. This amount is subject to annual adjustments for inflation.

This means that if a Fat Shack franchisee in Washington wants to enforce a non-compete agreement against an independent contractor, the contractor must earn more than the inflation-adjusted $250,000 threshold annually. If the contractor earns less than this amount, the non-compete agreement is not enforceable under Washington law. This provision aims to protect lower-earning independent contractors from being unduly restricted in their ability to work for competitors.

For a prospective Fat Shack franchisee in Washington, this information is crucial for understanding the limitations on non-competition agreements with independent contractors. Franchisees need to be aware of the earnings threshold and how it adjusts annually to ensure any non-compete agreements they use are legally enforceable. They should consult with legal counsel to ensure compliance with Washington state law regarding non-competition covenants.