What is the minimum annualized earnings threshold for a franchisee employee for a noncompetition covenant to be enforceable against them for a Moes Southwest Grill franchise in Washington?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
superseded by RCW 19.100.180(1), which requires the parties to deal with each other in good faith.
- 12. Indemnification. Any provision in the franchise agreement or related agreements requiring the franchisee to indemnify, reimburse, defend, or hold harmless the franchisor or other parties is hereby modified such that the franchisee has no obligation to indemnify, reimburse, defend, or hold harmless the franchisor or any other indemnified party for losses or liabilities to the extent that they are caused by the indemnified party's negligence, willful misconduct, strict liability, or fraud.
- 13. Attorneys' Fees. If the franchise agreement or related agreements require a franchisee to reimburse the franchisor for court costs or expenses, including attorneys' fees, such provision applies only i
Source: Item 22 — Contracts (FDD page 92)
What This Means (2025 FDD)
According to the 2025 Moe's Southwest Grill Franchise Disclosure Document, in the state of Washington, a noncompetition covenant is only enforceable against a franchisee's employee if their annualized earnings exceed $100,000. This figure will be adjusted annually for inflation. This is based on Washington state law RCW 49.62.020.
For a Moe's Southwest Grill franchisee in Washington, this means that if they want to enforce a non-compete agreement against an employee, that employee must be earning a substantial income. If the employee's earnings are below this threshold, the non-compete agreement is considered void and unenforceable under Washington law.
This also applies to independent contractors of a franchisee, but the earnings threshold is higher. A noncompetition covenant is void and unenforceable against an independent contractor if their earnings are less than $250,000 per year, also adjusted annually for inflation. Moe's Southwest Grill franchisees need to be aware of these stipulations to ensure compliance with Washington state law regarding noncompetition agreements.