What happens to provisions in the Itan franchise agreement that conflict with the limitations on noncompetition covenants in Washington?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
ton Franchise Investment Protection Act, in Washington.
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- 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.
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- Transfer fees are collectable to the extent that they reflect the franchisor's reasonable estimated or actual costs in effecting a transfer.
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- Pursuant to RCW 49.62.020, a non
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, any provisions within the franchise agreement or elsewhere that conflict with Washington state's limitations on noncompetition covenants are considered void and unenforceable in Washington. This specifically refers to RCW 49.62.020 and RCW 49.62.030, which address the enforceability of noncompetition covenants against employees and independent contractors.
Under Washington law, a noncompetition covenant is void and unenforceable against an employee of an Itan franchisee if the employee's annualized earnings from the party seeking enforcement do not exceed $100,000 per year, an amount that is adjusted annually for inflation. Similarly, a noncompetition covenant is unenforceable against an independent contractor of an Itan franchisee if their annualized earnings from the enforcing party do not exceed $250,000 per year, also subject to annual inflation adjustments.
This means that Itan franchisees in Washington cannot enforce non-compete agreements against employees or independent contractors who earn less than these specified amounts. Any clause in the Itan franchise agreement that attempts to impose stricter non-compete terms would be invalid in Washington state. Prospective franchisees should be aware of these limitations and ensure their employment agreements comply with Washington law.