What is the minimum annualized earnings threshold for a Stretch Zone franchisee's independent contractor 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.
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- 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 Stretch Zone's 2025 Franchise Disclosure Document, in Washington, a noncompetition covenant against an independent contractor of a Stretch Zone franchisee is only enforceable if the independent contractor's annualized earnings from the franchisee exceed $250,000 per year. This threshold will be adjusted annually for inflation.
This means that if a Stretch Zone 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 Stretch Zone business. If the contractor earns less than this amount, the non-compete agreement is considered void and unenforceable under Washington state law.
This provision protects lower-earning independent contractors from being unduly restricted in their ability to work for other businesses after leaving a Stretch Zone franchise. It also places a significant financial threshold on when a non-compete agreement can be enforced, which may impact the franchisee's ability to protect their business interests in certain situations. Prospective franchisees in Washington should be aware of this limitation and factor it into their business planning and contractor agreements.