In Washington, what is the minimum annualized earnings an employee of a Stretch Zone franchisee must make for a noncompetition covenant to be enforceable?
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 is void and unenforceable against an independent contractor of a franchisee unless the independent contractor's earnings from the party seeking enforcement, when annualized, exceed $250,000 per year. This amount 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, that contractor must be earning more than $250,000 annually (adjusted for inflation). If the contractor earns less than this amount, the non-compete agreement is not enforceable under Washington law.
This provision protects lower-earning independent contractors from being unduly restricted in their ability to work for competitors. It also means that Stretch Zone franchisees in Washington need to be aware of this earnings threshold when drafting and attempting to enforce non-compete agreements with their independent contractors. Franchisees should consult with legal counsel to ensure their non-compete agreements comply with Washington law.