What legal recourse does Byrider have if a franchisee violates the non-compete covenants?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
- 18.4 Enforcement of Covenants Not To Compete. The Franchisee acknowledges that violation of the covenants not to compete contained in this Agreement would result in immediate and irreparable injury to the Company for which no adequate remedy at law will be available. Accordingly, the Franchisee hereby acknowledges the Company's right to seek an injunction and agrees not to contest any application by the Company for such injunction to prohibit any conduct by the Franchisee in violation of the terms of those covenants not to compete set forth in this Agreement. The Franchisee expressly agrees that it may be conclusively presumed that a violation of the terms of said covenants not to compete was accomplished by and through the Franchisee's unlawful utilization of the Company's Confidential Information, know-how, methods and procedures. Further, the Franchisee expressly agrees that the existence of any claims it may have against the Company, whether or not arising from this Agreement, shall not constitute a defense to the enforcement by the Company for the covenants not to compete set forth in this Agreement.
- 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 Byrider's 2025 Franchise Disclosure Document, Byrider can seek an injunction against a franchisee who violates the non-compete covenants in the Franchise Agreement. The franchisee agrees not to contest any application by Byrider for such an injunction. This means Byrider can ask a court to order the franchisee to stop the violating behavior immediately. The FDD states that any violation of the non-compete terms would cause immediate and irreparable harm to Byrider, justifying the need for an injunction.
Furthermore, the franchisee acknowledges that any violation of the non-compete covenants can be presumed to involve the unlawful use of Byrider's confidential information, know-how, methods, and procedures. This presumption strengthens Byrider's case when seeking an injunction. The franchisee also agrees that any claims they may have against Byrider will not be a valid defense against Byrider enforcing the non-compete covenants. This ensures that disputes between the franchisee and Byrider do not prevent Byrider from protecting its business interests through the enforcement of the non-compete agreement.
In addition to injunctive relief, Byrider has specific recourse if a franchisee hires an employee of Byrider or its affiliates. If, during the term of the Franchise Agreement or within one year after its termination, a franchisee hires someone who is or was an employee of Byrider (or its affiliates) or any Byrider Business within the past year, without written consent, the franchisee must pay damages equal to three times the annual compensation of that employee. This provision aims to protect Byrider's investment in its employees and prevent franchisees from poaching talent.