What is the calculation for the damages a Byrider franchisee must pay if they hire a Byrider employee without consent?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
- 18.5 Fee for Employment Practices. Franchisee acknowledges that the Company and Byrider Businesses make substantial investment in the hiring, training, and developing of its and their employees. Although Franchisee is not restricted from soliciting and/or hiring such employees, Franchisee agrees that if, during the Term and for a one (1)-year period after the termination or expiration of this Agreement, Franchisee or any of its owners, directly or indirectly, on behalf of itself or any other person (whether as an owner, employee, agent, consultant or in any other capacity), employs any person who is an employee of, or who, within one year of being hired by Franchisee, was previously employed by, the Company (or any of its affiliates) or any Byrider Business, without the written consent of the Company (or such affiliate) or such Byrider Business, then Franchisee must immediately pay an amount of damages equal to three (3) times the annual compensation of such individual to the Company (or its affiliate) or Byrider Business, as applicable.
Source: Item 23 — Receipts (FDD pages 88–335)
What This Means (2025 FDD)
According to the 2025 Byrider Franchise Disclosure Document, a franchisee who hires an employee of Byrider or its affiliates without written consent will incur specific damages. This applies if the franchisee hires someone who is currently employed by Byrider (or an affiliate) or was employed by them within one year of being hired by the franchisee. This restriction applies during the term of the Franchise Agreement and for one year after the agreement's termination or expiration.
If a Byrider franchisee hires a covered employee without the necessary written consent, the franchisee must immediately pay damages. The amount of these damages is calculated as three times the annual compensation of the employee hired. This payment is made to Byrider or its affiliate, depending on who the employee was working for.
This policy is in place to protect Byrider's investment in its employees' hiring, training, and development. While franchisees are not restricted from soliciting or hiring Byrider employees, this fee serves as a deterrent against poaching employees and potentially disrupting Byrider's operations. Prospective franchisees should consider this potential cost when evaluating the financial implications of the franchise agreement.