What are the consequences if a Pearce Bespoke franchisee violates the in-term covenant not to compete?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
- (14) Franchisee violates the in-term covenant not to compete;
Franchisee agrees that damages alone cannot adequately compensate Franchisor if there is a violation of these non-competition covenants, and Franchisee stipulates that Franchisor would be irreparably harmed by such a violation and that preliminary and permanent injunctive relief is essential and must be entered for the protection of Franchisor, and Franchisee hereby agrees to waive any and all defenses to the entry of such injunction(s). Preliminary and permanent injunctive relief will be entered by a court of competent jurisdiction enforcing the non-competition covenants without Franchisor posting any bond or security, in addition to all other remedies that may be available to Franchisor at equity or law.
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to the 2025 Pearce Bespoke Franchise Disclosure Document, if a franchisee violates the in-term covenant not to compete, it constitutes a default under the Franchise Agreement. This gives Pearce Bespoke the option to terminate the agreement. Additionally, Pearce Bespoke can seek injunctive relief to stop the franchisee from continuing the competitive activity.
Pearce Bespoke stipulates that monetary damages alone would not adequately compensate them for a violation of the non-competition covenants. Therefore, the franchisee agrees that Pearce Bespoke would be irreparably harmed by such a violation. As a result, Pearce Bespoke is entitled to preliminary and permanent injunctive relief from a court of competent jurisdiction to enforce the non-competition agreements.
The FDD specifies that this injunctive relief can be entered without Pearce Bespoke needing to post any bond or security. This is in addition to any other remedies available to Pearce Bespoke under law or equity. This clause emphasizes the seriousness with which Pearce Bespoke views the non-compete agreement and ensures they have strong legal recourse against any franchisee who violates it.