What is the Liquidated Damages fee for violating confidentiality or non-competition covenants in the Pearce Bespoke Franchise Agreement?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
all costs including transportation, lodging, |
| 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 | $250 to $1,000 per occurrence | As incurred | Payable to us. |
| Violation Fee | |||
| 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 com |
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 may be liable for liquidated damages if they violate the confidentiality or non-competition covenants outlined in the Franchise Agreement. This fee is set at $100,000, and the franchisee is also responsible for Pearce Bespoke's attorney's fees incurred as a result of the violation. This fee is payable to Pearce Bespoke per occurrence.
This means that if a Pearce Bespoke franchisee breaches either the confidentiality or non-competition terms of their agreement, they will be required to pay Pearce Bespoke $100,000, in addition to covering the franchisor's legal costs. These covenants are designed to protect Pearce Bespoke's proprietary information and market position.
Liquidated damages are a common mechanism in franchising to provide a predetermined financial remedy for specific breaches of the franchise agreement. The amount is intended to compensate the franchisor for the anticipated harm caused by the franchisee's violation. Prospective franchisees should carefully review the confidentiality and non-competition clauses in the Franchise Agreement to fully understand the scope of these restrictions and the potential financial consequences of violating them. It is advisable to seek legal counsel to assess the reasonableness and enforceability of these provisions under applicable state law.