Does the restriction on operating a competing business to Pearce Bespoke apply to Personal Guarantors?
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.
Franchisee (and all Personal Guarantors and owners of all or part of Franchisee) will not, directly or indirectly, for a period of two (2) years after this Agreement expires or is terminated (except for a termination as a result of a Franchisor's breach), on their own account or as an employee,
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 resale of a mobile business not offered by Pearce Bespoke involving the purchase and/or sale of custom clothing and accessories located within the Franchised territory within a ten (10) mile radius of the thereof or any Pearce Bespoke Franchise. Franchisee expressly agrees that the two (2) year period and the ten (10) mile radius are the reasonable and necessary time and distance needed to protect Franchisor if this Agreement expires or is terminated for any reason.
C. Extension During Breach.
Franchisee (and all Personal Guarantors and owners of all or part of Franchisee) acknowledge and agree that the two (2) year non-competition period set forth in Section 18(B) above will be extended for a period of time equal to the time during which the Franchisee is in breach of any of the provisions of Section 18(B).
D. Injunctive Relief.
Franchisee agrees that damages alone cannot adequately compensate Franchisor if there is a violation of these non-competition covenants, and Franchisee stipulates that Franchisor would be irreparably harmed by such a violation and that preliminary and permanent injunctive relief is essential and must be entered for the protection of Franchisor, and Franchisee hereby agrees to waive any and all defenses to the entry of such injunction(s).
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to Pearce Bespoke's 2025 Franchise Disclosure Document, the restriction on operating a competing business does apply to Personal Guarantors. During the term of the Franchise Agreement, Personal Guarantors, along with the Franchisee and owners, are prohibited from engaging in any Pearce Bespoke clothing business that competes with the franchisor's brands. This restriction applies whether they act on their own account or as an employee, agent, consultant, partner, officer, director, or shareholder of another entity.
After the termination or expiration of the Franchise Agreement, Personal Guarantors are also subject to a non-compete clause for a period of two years. During this time, they cannot be involved in any business involving the resale of custom clothing and accessories within the franchised territory or within a ten-mile radius of any Pearce Bespoke franchise. This post-term restriction mirrors the limitations placed on the Franchisee and owners, ensuring that Personal Guarantors cannot leverage their knowledge or relationships to compete with Pearce Bespoke after the agreement ends.
Furthermore, the non-competition period can be extended if the Franchisee is in breach of the non-competition provisions. This extension applies equally to Personal Guarantors, reinforcing the franchisor's commitment to protecting its business interests and confidential information. The FDD also states that Pearce Bespoke can seek injunctive relief to prevent violations of these non-competition covenants, and Personal Guarantors waive any defenses to such actions, highlighting the seriousness with which Pearce Bespoke enforces these restrictions.