What are the implications if an owner breaches a provision of the Pearce Bespoke franchise agreement?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
itive or exemplary damages against the other and agree that in the event of a dispute between them, each will be limited to the recovery of actual damages sustained by it.
D. Enforcement of Franchise Agreement.
Notwithstanding the other provisions of this Section 19, Franchisee recognizes that the failure of a single franchisee to comply with the terms of its Pearce Bespoke Franchise Agreement would cause irreparable harm to Franchisor or to some or all other Pearce Bespoke franchisees. Franchisor and Franchisee therefore agree that, in the event of a breach or threatened breach of Sections 3, 8, 9, 12, 13, 14, 17, and/or 18 of this Agreement by Franchisee or in the event of any conduct by Franchisee which is illegal or is dishonest or misleading to Franchisee's customers or prospective customers or may impair the goodwill associated with the Marks, Franchisor may obtain a temporary, preliminary, or permanent injunction restraining such breach or obtain a decree of specific performance, without showing or proving any actual damage and without posting any bond or other security. The foregoing equitable remedy will be in addition to, and not in lieu of, all other remedies or rights which Franchisor might otherwise have by virtue of any breach of this Agreement by Franchisee.
E. Attorney's Fees.
The non-prevailing party will pay all costs and expenses, including reasonable attorney's fees, incurred by the prevailing party in any arbitration or action in court between Franchisor and Franchisee.
F. Reimbursement of Costs.
Franchisee shall reimburse Franchisor all costs and expenses, including but not limited to attorneys' fees, incurred by Franchisor as a result of Franchisee's default, including costs in connection with collection of any amounts owed to Franchisor and/or enforcement of Franchisor's rights under this Agreement.
20. SEVERABILITY AND CONSTRUCTION
A. Severability.
All provisions of this Agreement are severable, and this Agreement will be interpreted and enforced as if all completely invalid or unenforceable provisions were not contained herein, and partially valid and enforceable provisions will be enforced to the extent they are valid and enforceable.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISED BUSINESS (FDD page 30)
What This Means (2025 FDD)
According to Pearce Bespoke's 2025 Franchise Disclosure Document, if a franchisee fails to comply with the terms of their Franchise Agreement, it could cause irreparable harm to Pearce Bespoke or its other franchisees. In the event of a breach, or threatened breach, of specific sections of the agreement (Sections 3, 8, 9, 12, 13, 14, 17, and/or 18), or any illegal, dishonest, or misleading conduct that may impair the goodwill associated with the Pearce Bespoke Marks, the franchisor can seek a temporary, preliminary, or permanent injunction. This legal action can restrain the breach or enforce specific performance, without needing to prove actual damages or post a bond.
This equitable remedy is in addition to any other rights or remedies Pearce Bespoke may have due to the franchisee's breach. Furthermore, the non-prevailing party in any arbitration or court action between Pearce Bespoke and the franchisee will be responsible for covering all costs and expenses, including reasonable attorney's fees, incurred by the prevailing party.
Moreover, Pearce Bespoke requires franchisees to ensure that certain individuals, such as employees with managerial duties and access to confidential information, as well as corporate officers, directors, and shareholders, sign Confidentiality/Non-Competition Agreements. Franchisees must then actively enforce these agreements. Failure to obtain these agreements or to prosecute breaches can result in the franchisee being liable to indemnify and hold Pearce Bespoke harmless from any resulting liability, loss, attorneys' fees, or damage.
In summary, breaching the Pearce Bespoke franchise agreement can lead to significant legal and financial repercussions for the franchisee, including injunctions, payment of attorney's fees, and indemnification obligations. Franchisees must, therefore, diligently adhere to all terms of the agreement and ensure that all relevant parties comply with confidentiality and non-competition requirements.