What is the minimum annualized earnings threshold for a Stretch Zone franchisee's employee for a noncompetition covenant to be enforceable in Washington?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
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 if the franchisor is the prevailing party in any judicial or arbitration proceeding.
-
- Noncompetition Covenants. Pursuant to RCW 49.62.020, a noncompetition covenant is void and unenforceable against an employee, including an employee of a franchisee, unl
Source: Item 8 — Receipts. Any sale made must be in compliance with § 683(8) of the Franchise Sale Act (N.Y. Gen. Bus. L. § 680 et seq.), which describes the time period a Franchise Disclosure Document (offering prospectus) must be provided to a prospective franchisee before a sale may be made. New York law requires a franchisor to provide the Franchise Disclosure Document at the earliest of the first personal meeting or ten (10) business days before the execution of the franchise or other agreement or the payment of any consideration that relates to the franchise relationship. (FDD pages 99–263)
What This Means (2025 FDD)
According to the 2025 Stretch Zone FDD, a noncompetition covenant is void and unenforceable against an independent contractor of a franchisee in Washington State unless the independent contractor's earnings, when annualized, exceed $250,000 per year. This amount will be adjusted annually for inflation. This means that Stretch Zone franchisees in Washington cannot enforce non-compete agreements against independent contractors who earn less than this threshold.
This provision is based on Washington State law (RCW 49.62.030), and any conflicting terms in the franchise agreement are void and unenforceable in Washington. This protects lower-earning independent contractors from being restricted by non-compete agreements, allowing them to seek other employment opportunities.
For a prospective Stretch Zone franchisee in Washington, this means they need to be aware of the limitations on non-competition agreements with independent contractors. If an independent contractor earns less than the specified amount (initially $250,000 per year, adjusted for inflation), a non-compete agreement will not be enforceable. This could impact the franchisee's ability to prevent those contractors from working for competing businesses after leaving the Stretch Zone franchise.