What is the annual earnings threshold for a noncompetition covenant to be enforceable against an independent contractor of a Pearce Bespoke franchisee in Washington?
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, in the state of Washington, a noncompetition covenant is only enforceable against an independent contractor of a Pearce Bespoke franchisee if the independent contractor's annualized earnings from the franchisee exceed $250,000 per year. This threshold is subject to annual adjustments for inflation. This stipulation is in accordance with RCW 49.62.030. Any conflicting provisions within the franchise agreement are considered void and unenforceable in Washington.
This means that if a Pearce Bespoke franchisee in Washington wants to enforce a non-compete agreement against an independent contractor, they can only do so if that contractor earns more than $250,000 annually from the franchisee's business. The figure will be adjusted for inflation each year, so franchisees need to stay updated on the current threshold. If the contractor earns less than this amount, the non-compete agreement is not legally enforceable.
This provision protects independent contractors from being unduly restricted in their ability to work for others if their earnings from the Pearce Bespoke franchise are below a certain level. It also ensures that Pearce Bespoke franchisees operating in Washington must be aware of and comply with these specific state laws regarding non-competition agreements. Prospective franchisees should consult with legal counsel to fully understand the implications of these regulations in Washington.