What is the minimum annualized earnings an employee of a Fat Shack franchisee must earn for a noncompetition covenant to be enforceable in Washington?

According to the 2025 Fat Shack Franchise Disclosure Document, in Washington, a noncompetition covenant is void and unenforceable against an employee of a Fat Shack franchisee unless the employee's earnings, when annualized, exceed $100,000 per year. This amount will be adjusted annually for inflation. This means that Fat Shack franchisees in Washington cannot enforce non-compete agreements against employees who earn less than this threshold.

This provision is based on Washington state law (RCW 49.62.020), which aims to protect lower-earning employees from overly restrictive non-compete agreements. The law also specifies that this earnings threshold will be adjusted annually to account for inflation, ensuring that the protection remains relevant over time.

For a prospective Fat Shack franchisee in Washington, this means that any non-competition agreements they require their employees to sign are only enforceable if the employee's annualized earnings are above the specified amount. If a franchisee attempts to enforce a non-compete against an employee earning less than this amount, the agreement will be considered void and unenforceable under Washington law. Franchisees should consult with legal counsel to ensure their non-competition agreements comply with these requirements.