Does the arbitration agreement for Pearce Bespoke survive termination or non-renewal of the Franchise Agreement?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
9. CONFIDENTIAL INFORMATION
A. Non-Disclosure of Confidential Information.
Franchisee and those individuals who have signed the Personal Guaranty attached hereto as Attachment B agree to use and permit the use of Franchisor's Confidential Information (as defined below) solely in connection with the operation of the Pearce Bespoke Franchise.
Franchisee and Personal Guarantors further agree that they will never, during the initial term or any renewal term of this Agreement, or any time after this or any renewal Franchise Agreement expires or terminates, or Franchisee's rights under this Agreement or any renewal Franchise Agreement are assigned or terminated, divulge or use any of Franchisor's Confidential Information for the benefit of any third party (including any person, business entity or enterprise of any type or nature), nor will Franchisee or Personal Guarantors directly or indirectly aid such third party to imitate, duplicate or "reverse engineer" any of Franchisor's Confidential Information. "Confidential Information" means all information, knowledge, trade secrets, or know-how utilized by the Business System, or which otherwise concerns Franchisee's or Franchisor's systems of operation, programs, services, products, customers, practices, materials, books, records, manuals, computer files, databases, or software.
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to Pearce Bespoke's 2025 Franchise Disclosure Document, the details of whether the arbitration agreement survives termination or non-renewal of the Franchise Agreement are not explicitly detailed in the provided excerpts. However, Item 22 discusses contracts and includes information on franchisee obligations upon termination, covenants not to compete, and enforcement of the Franchise Agreement. These sections outline specific actions and restrictions placed on the franchisee both during and after the term of the agreement. Also, the document states that Franchisee and Personal Guarantors agree that they will never, during the initial term or any renewal term of this Agreement, or any time after this or any renewal Franchise Agreement expires or terminates, divulge or use any of Franchisor's Confidential Information for the benefit of any third party. This suggests that certain obligations extend beyond the agreement's term.
While the FDD excerpts do not directly address the survival of the arbitration agreement, the inclusion of post-termination obligations indicates that some contractual elements remain in effect after the franchise term ends. The non-disclosure of confidential information, for instance, is explicitly stated to continue even after the agreement expires or terminates.
To fully understand whether the arbitration agreement remains in force post-termination or non-renewal, a prospective Pearce Bespoke franchisee should seek clarification from the franchisor. Specifically, they should inquire about the specific clauses within the Franchise Agreement that govern dispute resolution and whether these clauses are intended to survive the termination or non-renewal of the agreement. Understanding the duration and scope of the arbitration agreement is crucial for assessing potential legal recourse and obligations after the franchise relationship concludes.