Will the $100,000 and $250,000 earnings thresholds for non-compete agreements related to Pearce Bespoke franchises in Washington be adjusted annually?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
se 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 under RCW 49.62.030 unle
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to Pearce Bespoke's 2025 Franchise Disclosure Document, the earnings thresholds that trigger the enforceability of non-competition covenants in Washington State will be adjusted annually for inflation. Specifically, for an employee of a Pearce Bespoke franchisee, the non-compete is void if their annualized earnings do not exceed $100,000. For an independent contractor of a Pearce Bespoke franchisee, this threshold is $250,000 in annualized earnings.
This annual adjustment for inflation is mandated by Washington State law (RCW 49.62.020 and RCW 49.62.030). This means that each year, these income figures will likely increase to account for changes in the cost of living. Pearce Bespoke franchisees in Washington need to be aware of these annually adjusted thresholds to ensure their non-competition agreements are enforceable under Washington law.
For a prospective Pearce Bespoke franchisee, this information is important for understanding the legal limitations on non-compete agreements within their workforce. They should consult with legal counsel to ensure their agreements comply with current Washington state law and to understand how the annual inflation adjustments may impact their business operations and contractual relationships with employees and independent contractors.