To whom is the Liquidated Damages fee payable if a Pearce Bespoke franchisee violates 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, the liquidated damages fee for violating confidentiality or non-competition covenants is payable to Pearce Bespoke. This fee is set at $100,000, in addition to the franchisor's attorney's fees. This fee is incurred each time a violation occurs.
For a prospective franchisee, this means that breaching the confidentiality or non-competition terms of the franchise agreement can result in a significant financial penalty. The $100,000 liquidated damages fee, coupled with the obligation to cover Pearce Bespoke's legal costs, could create a substantial financial burden for the franchisee.
It is important for franchisees to fully understand the scope and limitations of the confidentiality and non-competition covenants outlined in the franchise agreement. Franchisees should seek legal counsel to clarify these obligations and ensure they are able to comply with them. This will help avoid potential violations and the associated financial repercussions. This is a fairly standard clause in most franchise agreements, but the amount of the fee can vary significantly.