Does the Pearce Bespoke Franchise Agreement include a covenant not to compete that continues after the franchise is terminated?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 22: CONTRACTS]
18. FRANCHISEE'S COVENANTS NOT TO COMPETE
A. During Term.
During the term of the Franchise Agreement, Franchisee will receive proprietary information, materials, and trade secrets specifically geared to and utilized in the Pearce Bespoke tailoring business operations for all of Franchisor's franchised brands. To protect the valuable proprietary information and prevent Franchisee from using that information to operate a business that competes with any of Franchisor's clothing brands, Franchisee (and all Personal Guarantors and owners of all or part of Franchisee) will not, during the term of this Agreement, on their own account or as an employee, agent, consultant, partner, officer, director, or shareholder of any other person, firm, entity, partnership or corporation, own, operate, lease, franchise, conduct, engage in, be connected with, have any interest in, or assist any person or entity engaged in any Pearce Bespoke clothing business not offered by Pearce Bespoke involving the purchase and/or sale of custom clothing and accessories, without Franchisor's prior written consent**.**
B. After Termination.
Franchisee (and all Personal Guarantors and owners of all or part of Franchisee) will not, directly or indirectly, for a period of two (2) years after this Agreement expires or is terminated (except for a termination as a result of a Franchisor's breach), on their own account or as an employee, consultant, partner, officer, director, or shareholder of any other person, firm, entity, partnership or corporation, own, operate, lease, franchise, conduct, engage in, be connected with, have any interest in or assist any person or entity engaged in any resale of a mobile business not offered by Pearce Bespoke involving the purchase and/or sale of custom clothing and accessories located within the Franchised territory within a ten (10) mile radius of the thereof or any Pearce Bespoke Franchise. Franchisee expressly agrees that the two (2) year period and the ten (10) mile radius are the reasonable and necessary time and distance needed to protect Franchisor if this Agreement expires or is terminated for any reason.
C. Extension During Breach.
Franchisee (and all Personal Guarantors and owners of all or part of Franchisee) acknowledge and agree that the two (2) year non-competition period set forth in Section 18(B) above will be extended for a period of time equal to the time during which the Franchisee is in breach of any of the provisions of Section 18(B).
D. Injunctive Relief.
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 Pearce Bespoke's 2025 Franchise Disclosure Document, the Franchise Agreement includes a covenant not to compete that continues after the agreement expires or is terminated. Specifically, for a period of two years after the agreement expires or is terminated (except if terminated due to Pearce Bespoke's breach), the franchisee is restricted from engaging in any competitive Pearce Bespoke clothing business. This restriction applies to the franchisee, personal guarantors, and owners of the franchisee.
The non-compete clause prevents the franchisee from owning, operating, or being involved with any business that involves the purchase and/or sale of custom clothing and accessories that is not offered by Pearce Bespoke. The restricted area is within a ten-mile radius of the former franchise location or any other Pearce Bespoke franchise.
Furthermore, if the franchisee breaches the non-competition agreement, the two-year non-competition period will be extended by a time equal to the duration of the breach. Pearce Bespoke can seek injunctive relief to prevent any violation of the non-competition covenants, and the franchisee agrees that damages alone may not adequately compensate Pearce Bespoke for a breach. The franchisee also waives any defenses to the entry of an injunction.