For Pump It Up franchisees, what happens to the $100,000 earnings threshold for non-competition covenants?
Pump_It_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
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 noncompetition covenant is void and unenforceab
Source: Item 23 — RECEIPTS (FDD pages 60–225)
What This Means (2025 FDD)
According to Pump It Up's 2025 Franchise Disclosure Document, the enforceability of non-competition covenants for employees of a Pump It Up franchisee in Washington State is tied to their earnings. Specifically, pursuant to RCW 49.62.020, a noncompetition covenant is void and unenforceable against an employee if their annualized earnings from the party seeking enforcement (i.e., the franchisee) exceed $100,000 per year. This amount is subject to annual adjustments for inflation.
For independent contractors of a Pump It Up franchisee in Washington, a similar rule applies under RCW 49.62.030. A noncompetition covenant is void and unenforceable if the independent contractor's annualized earnings from the franchisee exceed $250,000 per year, also adjusted annually for inflation.
This means that any provisions within the Pump It Up franchise agreement or other related documents that conflict with these earnings-based limitations on non-competition covenants are considered void and unenforceable in Washington. This is particularly relevant for prospective Pump It Up franchisees in Washington, as it clarifies the legal boundaries of non-compete agreements with their employees and independent contractors, ensuring compliance with state law.