In Washington, what is the minimum annualized earnings threshold for a noncompetition covenant to be enforceable against an independent contractor of a Focalpoint Coaching franchisee?
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
Source: Item 22 — Contracts (FDD pages 56–57)
What This Means (2025 FDD)
According to Focalpoint Coaching's 2025 Franchise Disclosure Document, in Washington, a noncompetition covenant is void and unenforceable against an independent contractor working for a Focalpoint Coaching franchisee if the independent contractor's annualized earnings from the party seeking enforcement do not exceed $250,000. This amount will be adjusted annually for inflation.
This means that if a Focalpoint Coaching franchisee in Washington wants to enforce a non-compete agreement against an independent contractor, the contractor must be earning at least $250,000 per year from that franchisee. If the contractor earns less than this threshold, the non-compete agreement is not legally enforceable. This provision is based on Washington state law (RCW 49.62.030), and any conflicting terms in the franchise agreement are void in Washington.
For a prospective Focalpoint Coaching franchisee in Washington, this information is crucial for understanding the limitations on non-compete agreements with independent contractors. It highlights the importance of structuring agreements and compensation in a way that aligns with state law to ensure enforceability, especially when protecting the business's interests. Franchisees should consult with legal counsel to ensure compliance with these regulations and to draft enforceable agreements.