Does the Liquidated Damages fee for Pearce Bespoke cover all violations of the Franchise Agreement?
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 |
| Operational Standards Violation Fee | $250 to $1,000 per occurrence | As incurred | Payable to us. |
| Audit Expenses | Cost and expenses related | As invoiced after | Payable only if understatement is |
| to audit | inspection | greater than 2% of Gross Sales |
Source: Item 6 — OTHER FEES (FDD pages 11–15)
What This Means (2025 FDD)
According to Pearce Bespoke's 2025 Franchise Disclosure Document, the liquidated damages fee does not cover all violations of the Franchise Agreement. The FDD specifies that the liquidated damages fee of $100,000 applies specifically to violations of the confidentiality and/or non-competition covenants outlined in the Franchise Agreement. This means that if a franchisee breaches either the confidentiality or non-competition terms, they will be liable for this fee, in addition to Pearce Bespoke's attorney's fees.
However, the FDD also lists other fees for different types of violations. For instance, there is an "Operational Standards Violation Fee" ranging from $250 to $1,000 per occurrence. This indicates that breaches of operational standards are handled separately and do not fall under the $100,000 liquidated damages penalty. Additionally, franchisees may incur costs and expenses related to audits if an understatement of gross sales is greater than 2%.
Therefore, prospective Pearce Bespoke franchisees should understand that the $100,000 liquidated damages fee is specifically tied to confidentiality and non-competition breaches. Other violations of the Franchise Agreement will be subject to different fees and penalties as outlined in the FDD. It is important to carefully review the Franchise Agreement to fully understand all potential fees and penalties for various violations.