What is the effect of conflicting provisions in the Focalpoint Coaching franchise agreement with Washington's noncompetition covenant laws?
Focalpoint_Coaching Franchise · 2025 FDDAnswer from 2025 FDD Document
Investment Protection Act, in Washington.
A release or waiver of rights executed by a franchisee may not include rights under the Washington Franchise Investment Protection Act or any rule or order thereunder except when executed pursuant to a negotiated settlement after the agreement is in effect and where the parties are represented by independent counsel. Provisions such as those which unreasonably restrict or limit the statute of limitations period for claims under the Act, or rights or remedies under the Act such as a right to a jury trial, may not be enforceable.
Transfer fees are collectable to the extent that they reflect the franchisor's reasonable estimated or actual costs in effecting a transfer.
Pursuant to RCW 49.62.020, a noncompetition covenant is void and unenforceable against an employee, including an employee of a franchisee, unless the employee's earnings from the party seeking enforcement, when annualized, exceed $100,000 per year (an amount that will be adjusted annually for inflation). In addition, a noncompetition covenant is void and unenforceable against an independent contractor of a franchisee unde
Source: Item 22 — Contracts (FDD pages 56–57)
What This Means (2025 FDD)
According to the 2025 Focalpoint Coaching Franchise Disclosure Document, Washington state law impacts the enforceability of noncompetition covenants within the franchise agreement. Specifically, for an employee of a Focalpoint Coaching franchisee, a noncompetition covenant is void and unenforceable unless the employee's annualized earnings exceed $100,000. This amount is subject to annual adjustments for inflation. For independent contractors of a Focalpoint Coaching franchisee, a noncompetition covenant is void and unenforceable unless their annualized earnings exceed $250,000, also adjusted annually for inflation.
This means that any part of the Focalpoint Coaching franchise agreement that conflicts with these financial thresholds is not enforceable in Washington. The FDD explicitly states that provisions contradicting these limitations are void. This protects lower-earning employees and independent contractors working for Focalpoint Coaching franchisees in Washington from being unduly restricted by non-compete agreements.
Furthermore, Focalpoint Coaching is prohibited from restricting a franchisee from soliciting or hiring any employee of another Focalpoint Coaching franchisee or any employee of the franchisor. Any provisions in the franchise agreement that attempt to impose such restrictions are void and unenforceable in Washington. This aspect promotes greater labor mobility within the Focalpoint Coaching franchise system in Washington, allowing franchisees to recruit talent from each other and from the franchisor itself without legal impediments.