What is the minimum annualized earnings threshold for a non-competition covenant to be enforceable against an independent contractor of a Kidokinetics franchisee in Washington?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
der 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 non-competition 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 non-competition covenant is void and unenforceable against an independent contractor of a franchisee under RCW 49.62.030 unless the independent contractor's earnings from the party seeking enforcement, when annualized, exceed $250,000 per year (an
Source: Item 23 — RECEIPT (FDD pages 59–205)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, in Washington, a non-competition covenant is void and unenforceable against an independent contractor of a Kidokinetics franchisee unless the independent contractor's earnings from the party seeking enforcement, when annualized, exceed $250,000 per year. This amount will be adjusted annually for inflation.
This means that if a Kidokinetics franchisee in Washington wants to enforce a non-compete agreement against an independent contractor, the contractor must be earning more than $250,000 annually from that franchisee. If the contractor earns less than this amount, the non-compete agreement is not legally enforceable. This threshold is put in place to protect lower-earning independent contractors from being unduly restricted in their ability to work.
It is important to note that this threshold is subject to annual adjustments for inflation, so the actual minimum earnings required for enforceability may change over time. Franchisees should stay informed about these adjustments to ensure their non-compete agreements are enforceable. This provision specifically applies to independent contractors and differs from the rules applicable to employees, who have a separate earnings threshold for non-compete enforceability under Washington law.