In the event of a breach of confidentiality or non-competition covenants, can Bhc seek injunctive relief without proving actual damages?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
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.
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 can seek injunctive relief for breaches of confidentiality and non-competition agreements without needing to prove actual damages. The FDD states that such breaches would cause immediate and irreparable damage to Bhc, which would be difficult to measure and not fully remedied by monetary damages alone. Therefore, Bhc has the right to enforce the agreement and seek injunctive relief to prevent breaches, without having to prove actual damages.
This means that if a franchisee violates the confidentiality or non-competition terms, Bhc can quickly go to court to obtain an order preventing further violations. This is a significant advantage for Bhc, as it does not have to go through a lengthy and complex process of proving the exact financial harm caused by the breach. The franchisee also consents to the issuance of an injunction and specific performance without requiring a bond or other security.
This clause is fairly standard in franchise agreements, as protecting confidential information and preventing unfair competition are critical for the success of a franchise system. It is important for a prospective Bhc franchisee to understand the scope of the confidentiality and non-competition covenants, as violating them could lead to immediate legal action and potential restrictions on their business activities. The franchisee also acknowledges that these remedies are in addition to any other rights or remedies, whether at law or in equity, which may be available to Bhc, including monetary damages.