What is the liquidated damages amount for a Pearce Bespoke franchisee's violation of confidentiality or non-competition covenants?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Liquidated Damages – Violation of Confidentiality or Non-Competition Covenants | $100,000, plus our attorneys' fees | Per Occurrence | Payable to us if you violate the confidentiality and/or non competition covenants in the Franchise Agreement |
Source: Item 6 — OTHER FEES (FDD pages 11–15)
What This Means (2025 FDD)
According to Pearce Bespoke's 2025 Franchise Disclosure Document, a franchisee who violates the confidentiality or non-competition covenants outlined in the Franchise Agreement will be required to pay liquidated damages. This fee is set at $100,000, in addition to Pearce Bespoke's attorney's fees. This payment is due per occurrence of a violation.
Liquidated damages are a common mechanism in franchise agreements designed to compensate the franchisor for losses resulting from a franchisee's breach of contract, particularly concerning confidentiality and non-competition. These covenants are crucial for protecting Pearce Bespoke's proprietary information, customer relationships, and market share. The $100,000 fee is intended to cover the potential financial harm that Pearce Bespoke may suffer if a franchisee were to, for example, share confidential business strategies with a competitor or operate a competing business during or after the franchise term.
For a prospective Pearce Bespoke franchisee, it is essential to fully understand the scope and terms of the confidentiality and non-competition covenants in the Franchise Agreement. Franchisees should carefully consider the implications of these covenants and the potential financial consequences of violating them. It is advisable to seek legal counsel to review the Franchise Agreement and ensure a clear understanding of these obligations before signing.