Is 360 Painting required to post a bond to obtain an injunction against a franchisee violating the non-competition agreement?
360_Painting Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee further understands and acknowledges the difficulty of ascertaining monetary damages and the irreparable harm that would result from breach of these covenants, and agrees that, in the event of the actual or threatened breach of this Section 18 by Franchisee or any of its partners or shareholders or any member of the immediate family of Franchisee or any of its partners or shareholders, Franchisor shall be entitled to an injunction, without bond, restraining such person from any such actual or threatened breach, in addition to any other relief to which Franchisor may be entitled in law or equity.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 56)
What This Means (2025 FDD)
According to 360 Painting's 2025 Franchise Disclosure Document, 360 Painting is not required to post a bond to obtain an injunction against a franchisee who violates the non-competition agreement. The FDD states that franchisees acknowledge the difficulty of determining monetary damages and the irreparable harm that would result from breaching the non-competition covenants.
Specifically, the franchise agreement states that in the event of an actual or threatened breach of Section 18 (which covers non-competition) by the franchisee, their partners, shareholders, or immediate family members, 360 Painting is entitled to an injunction without having to post a bond. This allows 360 Painting to quickly seek a court order to stop the franchisee from violating the non-compete agreement without the added step of securing a bond.
This provision is favorable for 360 Painting as it reduces the financial burden and time required to enforce the non-competition agreement. For a prospective franchisee, this means that 360 Painting can act swiftly to prevent any perceived violations of the non-compete clause, potentially impacting the franchisee's activities after the franchise agreement ends. The non-compete extends for two years after termination or from a court order restraining the bound party from violating Section 18.1.