In Washington, what happens to provisions in the Focalpoint Coaching Franchise Agreement that conflict with limitations on noncompetition covenants?
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, provisions within the franchise agreement that conflict with Washington state's limitations on noncompetition covenants are considered void and unenforceable. This protection extends to both employees and independent contractors associated with a Focalpoint Coaching franchise operating in Washington.
Specifically, Washington law (RCW 49.62.020) states that a noncompetition covenant is unenforceable against an employee if their annualized earnings from the party seeking enforcement do not exceed $100,000, a figure that is adjusted annually for inflation. For independent contractors (RCW 49.62.030), a noncompetition covenant is unenforceable if their annualized earnings from the enforcing party do not exceed $250,000, also subject to annual inflation adjustments. These statutes mean Focalpoint Coaching cannot enforce non-compete agreements against franchisees' employees or contractors earning below these thresholds.
Furthermore, Focalpoint Coaching is prohibited from restricting or preventing a franchisee from soliciting or hiring employees of either another franchisee within the Focalpoint Coaching system or employees of Focalpoint Coaching itself. Any clauses within the franchise agreement that attempt to impose such restrictions are void and unenforceable in Washington. This aspect of the Washington Franchise Investment Protection Act aims to foster a competitive labor market and prevent undue restrictions on employment opportunities within the franchise network.