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

According to Fat Shack's 2025 Franchise Disclosure Document, in Washington, a noncompetition covenant is only enforceable against an independent contractor of a Fat Shack franchisee if the independent contractor's earnings from the party seeking enforcement, when annualized, exceed $250,000 per year. This amount will be adjusted annually for inflation.

This means that if a Fat Shack 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. If the contractor earns less than this amount, the non-compete agreement is considered void and unenforceable under Washington state law.

This provision is important for prospective Fat Shack franchisees in Washington to understand, as it affects their ability to restrict the activities of independent contractors after their relationship with the franchise ends. Franchisees should be aware of this limitation when drafting agreements with independent contractors and consider the potential implications for their business. It is also important to note that the $250,000 threshold is subject to annual adjustments for inflation, so franchisees should stay informed of the current threshold to ensure compliance.