In Washington, are noncompetition covenants enforceable against Stretch Zone franchisee independent contractors if their earnings, when annualized, do not exceed $250,000 per year?
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 the state of Washington, noncompetition covenants are not enforceable against independent contractors of a Stretch Zone franchisee if the independent contractor's earnings, when annualized, do not exceed $250,000 per year. This is based on Washington state law (RCW 49.62.030). The $250,000 threshold will be adjusted annually for inflation.
This means that if a Stretch Zone franchisee in Washington hires an independent contractor, they cannot enforce a non-compete agreement against that contractor if the contractor's annualized earnings are below the specified amount. This provides protection for lower-earning independent contractors, allowing them to work for competitors or start their own businesses without legal repercussions from the franchisee.
Any provision in the Stretch Zone franchise agreement or any other agreement that conflicts with this limitation is void and unenforceable in Washington. This ensures that the state law takes precedence over any contractual terms that might attempt to restrict an independent contractor's ability to work in the same field after leaving a Stretch Zone franchise, provided their income is below the threshold.