What is the consequence if a Bb.Q Chicken franchisee violates the non-compete agreement?
Bb_Q_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
ted versions thereof. Such covenants shall be substantially in the forms set forth in Attachment 4 as revised and updated from time to time and contained in the Manual. Franchisee shall indemnify and hold Franchisor harmless from any and all liability, loss, attorneys' fees, or damage Franchisor may suffer as a result of Franchisee's failure to obtain executed restricted covenants by employees, agents and third persons as required by this Section.
10.3.5 Liquidated Damages – Violation of Confidentiality or Non-Competition Covenants. In the event Franchisee and/or Principal(s) violate the covenants of confidentiality and/or noncompetition set forth herein, Franchisee and/or Principal(s) shall pay Franchisor a lump sum payment (as liquidated damages and not as a penalty) an amount equal to One Hundred Thousand Dollars ($100,000.00), plus Franchisor's attorney's fees, for each such violation. You and Principal(s) acknowledge that a precise calculation of the full extent of the damages that Franchisor will incur in the event of Franchisee's and/or Principal(s)' violation of the covenants of confidentiality and/or non-competition is difficult to determine and that this lump sum payment is reasonable in light thereof. The liquidated damages payable by Franchisee pursuant to this Section 10.3.5 shall be in addition to all other amounts payable under this Agreement and shall not affect Franchisor's right to obtain appropriate injunctive relief and remedies pursuant to any other provision hereof.
10.4 Injunctive Relief.
Franchisee and Principal(s) acknowledge that a violation of the covenants of confidentiality and non-competition contained in this Agreement would result in immediate and irreparable injury to Franchisor for which monetary damages cannot fully remedy. Accordingly, Franchisee and Principal(s) hereby consent to the entry of a temporary and permanent injunction prohibiting any conduct
Source: Item 23 — RECEIPTS (FDD pages 62–283)
What This Means (2025 FDD)
According to Bb.Q Chicken's 2025 Franchise Disclosure Document, if a franchisee or their principals violate the confidentiality or non-competition covenants, they must pay Bb.Q Chicken a lump sum of $100,000. This is considered liquidated damages and not a penalty. This payment also includes Bb.Q Chicken's attorney's fees for each violation.
The Bb.Q Chicken FDD states that this lump sum payment is in addition to all other amounts payable under the Franchise Agreement. It also does not affect Bb.Q Chicken's right to seek injunctive relief and other remedies. Injunctive relief refers to a court order that would prohibit the franchisee or their principals from continuing the behavior that violates the non-compete agreement.
The franchise agreement acknowledges that a violation of the non-compete agreement would cause immediate and irreparable harm to Bb.Q Chicken. Monetary damages may not fully compensate for this harm. Therefore, franchisees and their principals consent to a temporary or permanent injunction to prevent any violation of the non-compete terms. This injunctive relief does not prevent Bb.Q Chicken from pursuing claims for monetary damages resulting from the breach.