Does the restriction on operating a competing business to Pearce Bespoke apply to owners of the franchisee?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
e fails to remove all signs and other materials bearing the Marks, Franchisor may do so at Franchisee's expense.
18. FRANCHISEE'S COVENANTS NOT TO COMPETE
A. During Term.
During the term of the Franchise Agreement, Franchisee will receive proprietary information, materials, and trade secrets specifically geared to and utilized in the Pearce Bespoke tailoring business operations for all of Franchisor's franchised brands. To protect the valuable proprietary information and prevent Franchisee from using that information to operate a business that competes with any of Franchisor's clothing brands, Franchisee (and all Personal Guarantors and owners of all or part of Franchisee) will not, during the term of this Agreement, on their own account or as an employee, agent, consultant, partner, officer, director, or shareholder of any other person, firm, entity, partnership or corporation, own, operate, lease, franchise, conduct, engage in, be connected with, have any interest in, or assist any person or entity engaged in any Pearce Bespoke clothing business not offered by Pearce Bespoke involving the purchase and/or sale of custom clothing and accessories, without Franchisor's prior written consent**.**
B. After Termination.
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to Pearce Bespoke's 2025 Franchise Disclosure Document, the non-compete covenants apply to the franchisee, personal guarantors, and owners of the franchisee. During the term of the Franchise Agreement, these parties are restricted from owning, operating, or being involved with any business that competes with Pearce Bespoke's clothing business. This includes involvement as an employee, agent, consultant, partner, officer, director, or shareholder of another entity. This restriction applies to businesses involving the purchase and/or sale of custom clothing and accessories, without Pearce Bespoke's prior written consent.
After the Franchise Agreement expires or is terminated, the franchisee, personal guarantors, and owners of the franchisee are still restricted from competing with Pearce Bespoke. This post-term non-compete lasts for a period of two years, except in cases where the termination results from Pearce Bespoke's breach of the agreement. The restrictions apply whether the individual is acting on their own account or as an employee.
This non-compete agreement is fairly standard in franchising to protect the brand's proprietary information, trade secrets, and market position. Prospective Pearce Bespoke franchisees and their owners should carefully consider the implications of these restrictions, especially if they have prior experience or interests in the custom clothing and accessories industry. It is advisable to seek legal counsel to fully understand the scope and enforceability of these covenants.