What is the Liquidated Damages fee for Pearce Bespoke franchisees who violate confidentiality or non-competition covenants?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| meals, and wages, if applicable. | |||
| Annual Certification Training | $199 per session | Yearly | All active clothiers will be required to attend our annual certification training (the “Annual Certification Training”), which may be held online or in person at a location that we designate. We anticipate the cost of recertification will be approximately $199 and will be held monthly. |
| Approval of Supplier Fee | $500 plus cost of examination and approval of a supplier requested by Franchisee. | Prior to examination | You will purchase only such types, models or brands of items, furniture, equipment, signs, and supplies that We approve for Pearce Bespoke as meeting its specifications and standards, including specifications and standards for quality, design, warranties, appearance, function, and performance. |
| Operational Standards Violation Fee | $250 to $1,000 per occurrence | As incurred | Payable to us. |
| 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 and/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 fee is payable to Pearce Bespoke per occurrence of a violation.
Liquidated damages are a predetermined amount agreed upon in a contract that one party will pay to the other in the event of a breach. In the context of a Pearce Bespoke franchise, this means that if a franchisee violates the confidentiality or non-competition terms, they will automatically owe Pearce Bespoke $100,000 plus attorney's fees, without the need for Pearce Bespoke to prove actual damages in court. This can be a significant financial burden for a franchisee.
Confidentiality and non-competition covenants are common in franchise agreements to protect the franchisor's proprietary information and market share. These covenants typically restrict a franchisee from disclosing confidential information about the Pearce Bespoke system or operating a competing business during and after the franchise term. The high liquidated damages fee reflects the importance Pearce Bespoke places on protecting these interests.
Prospective franchisees should carefully review the confidentiality and non-competition clauses in the Pearce Bespoke Franchise Agreement to fully understand the scope of these restrictions and the potential consequences of violating them. It is advisable to seek legal counsel to assess the reasonableness and enforceability of these provisions under applicable state law.