How often is the minimum earnings amount adjusted for inflation regarding noncompetition covenants for Fat Shack employees in Washington?

According to the 2025 Fat Shack Franchise Disclosure Document, in Washington state, the minimum earnings threshold for noncompetition covenants to be enforceable against employees and independent contractors is adjusted annually for inflation. Specifically, for an employee of a Fat Shack franchisee, the noncompetition covenant is void and unenforceable if their annualized earnings from the party seeking enforcement do not exceed $100,000 per year; this amount is adjusted annually for inflation. Similarly, for an independent contractor of a Fat Shack franchisee, the noncompetition covenant is void and unenforceable if their annualized earnings from the party seeking enforcement do not exceed $250,000 per year, with this amount also being adjusted annually for inflation.

This means that Fat Shack franchisees in Washington need to be aware that non-compete agreements with their employees or independent contractors are only enforceable if those individuals meet the specified earnings thresholds, which increase each year with inflation. If an employee or contractor earns less than the adjusted minimum, the non-compete agreement is not valid under Washington law. This adjustment protects lower-earning workers and contractors from being unduly restricted in their future employment opportunities.

For a prospective Fat Shack franchisee, this information is crucial for understanding the limitations on enforcing non-competition agreements in Washington. They must ensure that their agreements comply with state law and that they are aware of the annually adjusted income thresholds. Failure to comply could result in unenforceable agreements, impacting their ability to protect their business interests. Franchisees should consult with legal counsel to ensure their agreements are compliant and to understand their rights and obligations under Washington law.