In the event of a breach of confidentiality and non-competition covenants, does Bhc need to prove actual damages to seek injunctive relief against the Master Franchisee?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
Master Franchisee further agrees that a breach of the confidentiality and non-competition covenants set forth above and, in
the Confidentiality, and Non-Competition Agreement (see Exhibit 4 to this Franchise Agreement) will cause immediate and irreparable damage to Franchisor that would be impossible or inadequate to measure and calculate and could not be fully remedied by monetary damages.
Accordingly, Franchisor has the right to specifically enforce this Agreement and seek injunctive or other equitable relief as may be necessary or appropriate to prevent such breach or continued breach without the necessity of proving actual damages by reason of any such breach or threatened breach of this Agreement. Master Franchisee further agrees that no bond or other security will be required in obtaining such equitable relief and hereby consents to the issuance of such injunction and to the ordering of specific performance. Master Franchisee further acknowledges that such remedies are in addition to any other rights or remedies, whether at law or in equity, which may be available to Franchisor, including monetary damages.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, Bhc does not need to prove actual damages to seek injunctive relief against a Master Franchisee for breaches of confidentiality and non-competition covenants. The FDD states that such breaches will cause immediate and irreparable damage to Bhc that would be impossible or inadequate to measure and could not be fully remedied by monetary damages.
Because of the potential for immediate and irreparable harm, Bhc has the right to specifically enforce the Franchise Agreement and seek injunctive or other equitable relief to prevent breaches or continued breaches of confidentiality and non-competition agreements without having to prove actual damages. The Master Franchisee also agrees that no bond or other security will be required for Bhc to obtain such equitable relief and consents to the issuance of an injunction and the ordering of specific performance.
This provision is significant for prospective Master Franchisees as it highlights the importance Bhc places on protecting its confidential information and maintaining non-competition. It also streamlines Bhc's ability to quickly obtain injunctive relief, which is a common practice in franchising to protect brand integrity and prevent unfair competition. The Master Franchisee acknowledges that these remedies are in addition to any other rights or remedies available to Bhc, including monetary damages.