Pearce_Bespoke 2025 Franchise FAQ - FDD Ninja

Question 1

For the Pearce Bespoke financial performance representation, how many clothiers were included in the data?

Accepted Answer

There are twenty-six (26) clothiers who operated from January through December 2024. We have excluded any clothiers who did not operate for the full twelve (12) months. We generally recommend that you have at least one clothier per Territory; however, there are some clothiers who operate in more than one Territory on behalf of the same Franchisee.

The basis for inclusion of this Financial Performance Representation is the affiliate-owned and franchised outlets represented below are similar to the franchise being offered under this Disclosure Document in terms of operations and product offerings. There are no material financial or operational characteristics of the represented affiliate-owned and franchised outlets that are reasonably anticipated to differ materially from future franchise outlet operations.

Written substantiation for the financial performance representation will be made available to the prospective franchisee upon request.

**Some outlets have earned this amount. Your individual results may differ. There is no assurance that you'll earn as much.**

Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 35–36)

Question 2

How many Pearce Bespoke franchises were sold during the period ended December 31, 2023?

Accepted Answer

abilities and Members' Equity (Deficiency)                                                                                                                               | \$                 | 929,411                                      | \$ | 71,811                            |

#### PEARCE BESPOKE FRANCHISING, LLC STATEMENTS OF OPERATIONS AND MEMBERS' EQUITY (DEFICIENCY)

|                                                       | Years Ended December 31, |    |          |
|-------------------------------------------------------|--------------------------|----|----------|
|                                                       | 2023                     |    | 2022     |
| Revenues: Initial franchise fees Equipment fees | \$ 164,210 168,000 | \$ | - -   |
| Franchise revenues                                    | 153,238                  |    | 36,593   |
| Royalties                                             | 47,008                   |    | 6,031    |
| Rebates                                               | 40,079                   |    | 426      |
| Total Revenues                                        | 572,535                  |    | 43,050   |
| Operating Expenses                                    | 1,052,399                |    | 89,414   |
| Net Income (Loss)                                     | (4

Source: Item 21 — FINANCIAL STATEMENTS (FDD page 39)

Question 3

What specific time period does the Pearce Bespoke financial performance data cover?

Accepted Answer

There are twenty-six (26) clothiers who operated from January through December 2024. We have excluded any clothiers who did not operate for the full twelve (12) months.

Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 35–36)

Question 4

What is the total estimated initial investment range for a Pearce Bespoke franchise, including the development fee?

Accepted Answer

| Type of Expenditure | Amount | Method of | When Due | To Whom |
|---|---|---|---|---|
|  |  | Payment |  | Payment Is Made |
|  |  |  |  |  |
| Development Fee (1) | $106,800 (2 Territories) | Lump sum | When sign Development Agreement | Us |
| Estimated Initial Investment for First Franchised Business (2) | $13,919 - $179,220 | As incurred | As incurred | Us and third parties |
| TOTAL | $120,719 - $286,020 |  |  |  |
|  |  |  |  |  |

Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 15–19)

Question 5

What was the total number of Pearce Bespoke franchised outlet transfers in 2024?

Accepted Answer

| State | Year | Number of Transfers |
|---|---|---|
| None | 2022 2023 2024 | 0 0 0 |
|  | 2022 | 0 |
| TOTAL | 2023 | 0 |
|  | 2024 | 0 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 36–39)

Question 6

What is the total number of new Pearce Bespoke outlets projected to open in the next fiscal year across all states?

Accepted Answer

| 2 | 0 | 0 | 0 | 0 | 2 |
|  | 2024 | 2 | 0 | 0 | 0 | 0 | 2 |
**TABLE 5 Projected Openings As of December 31, 2024**

| State | Franchise Agreements Signed But Outlets Not Opened | Projected New Outlets in the Next Fiscal Year | Projected New Company Owned Outlets in the Next Fiscal Year |
|-------|----------------------------------------------------------|-----------------------------------------------------|-------------------------------------------------------------------|
| AZ    | 0                                                        | 2                                                   | 0                                                                 |
| CA    | 0                                                        | 2                                                   | 0                                                                 |
| FL    | 0                                                        | 1                                                   | 0                                                                 |
| GA    | 0                                                        | 2                                                   | 0                                                                 |
| MD    | 0                                                        | 4                                                   | 0                                                                 |
| MO    | 0                                                        | 1                                                   | 0                                                                 |

| State | Franchise Agreements Signed But Outlets Not Opened | Projected New Outlets in the Next Fiscal Year | Projected New Company Owned Outlets in the Next Fiscal Year |
|-------|----------------------------------------------------------|-----------------------------------------------------|-------------------------------------------------------------------|
| MT    | 0                                                        | 1                                                   | 0                                                                 |
| NJ    | 0                                                        | 2                                                   | 0                                                                 |
| NY    | 0                                                        | 2                                                   | 0                                                                 |
| TN    | 0                                                        | 1                                                   | 0                                                                 |
| TX    | 0                                                        | 1                                                   | 0                                                                 |
| UT    | 0                                                        | 2                                                   | 0                                                                 |
| VA    | 0                                                        | 4                                                   | 0                                                                 |
| TOTAL | 0                                                        | 25                                                  | 0                                                                 |

Our fiscal year ends on December 31 of each year. We have presented all the foregoing numbers as of the issuance of this Disclosure Document.

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 36–39)

Question 7

What was the total revenue for Pearce Bespoke in 2024, including both performance obligations satisfied at a point in time and those satisfied by the passage of time?

Accepted Answer

the satisfaction of performance obligations in the Company's contracts with franchisees for the years ended December 31, 2024, is as follows:

|                                              | 2024         |
|----------------------------------------------|--------------|
| Performance obligations satisfied at a point |              |
| in time                                      | \$ 1,111,391 |
| Performance obligations satisfied by the     |

Source: Item 21 — FINANCIAL STATEMENTS (FDD page 39)

Question 8

Besides retail shops and online sales, what other forms of competition might Pearce Bespoke franchisees face?

Accepted Answer

The market for custom tailored men and women's clothing and accessories is well developed, competitive, and continues to expand as consumers recognize the value associated with these custom items. As a result, you will face significant competition, both directly and indirectly, from similar mobile custom clothing competitors. You will likely also compete with other retail custom clothing shops, on-line sales, and similar clothing websites. Pearce Bespoke and its franchisees will likely face increased competition as additional competitors enter the market. Several of these competitors are regional or national systems selling custom clothing and related accessories. Several of these competitors may have significantly greater financial resources than Pearce Bespoke and you.

Source: Item 1 — THE FRANCHISOR AND ANY PARENTS, PREDECESSORS AND AFFILIATES (FDD pages 7–8)

Question 9

Could some of Pearce Bespoke's competitors have greater financial resources than Pearce Bespoke franchisees?

Accepted Answer

The market for custom tailored men and women's clothing and accessories is well developed, competitive, and continues to expand as consumers recognize the value associated with these custom items. As a result, you will face significant competition, both directly and indirectly, from similar mobile custom clothing competitors. You will likely also compete with other retail custom clothing shops, on-line sales, and similar clothing websites. Pearce Bespoke and its franchisees will likely face increased competition as additional competitors enter the market. Several of these competitors are regional or national systems selling custom clothing and related accessories. Several of these competitors may have significantly greater financial resources than Pearce Bespoke and you.

Source: Item 1 — THE FRANCHISOR AND ANY PARENTS, PREDECESSORS AND AFFILIATES (FDD pages 7–8)

Question 10

What is the difference in risk between detecting material misstatements resulting from fraud versus error in Pearce Bespoke's financial statements?

Accepted Answer

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

Source: Item 21 — FINANCIAL STATEMENTS (FDD page 39)

Question 11

How does the initial franchise fee for Pearce Bespoke in Item 5 compare to the estimated initial investment range provided in Item 7?

Accepted Answer

When you sign your Franchise Agreement, you must pay to us the initial franchise fee ("Franchise Fee") of $55,900, for a Franchised Territory with a population of between 50,000 to 200,000 people or $29,000 for a Franchised Territory with a population of no more than 50,000 people. The Franchise Fee is due upon the signing of our Franchise Agreement and is considered fully earned by Pearce Bespoke upon payment. The Franchise Fee includes your license to operate the Franchise. This Franchise Fee is not refundable, in whole or in part, under any circumstances. The initial Franchise Fee is calculated and applied uniformly to all our franchisees. The method we use to calculate the Franchise Fee is uniform for all franchises that we offer through this Disclosure Document.

| TYPE OF | AMOUNT |  | METHOD |  | TO WHOM |
|---|---|---|---|---|---|
| EXPENDITURES1 | LOW | HIGH | OF | WHEN DUE | PAYMENT IS |
|  | ESTIMATE | ESTIMATE | PAYMENT |  | TO BE MADE |
| Initial Franchise Fee2 | $29,000 | $55,900 | Lump sum | When you sign the Franchise Agreement | Pearce Bespoke |
| Travel and Living Expenses For Training3 | $199 | $2,500 | As arranged | As incurred | Lodging, Transportation, and Meals |
| On-Site Training4 | $0 | $5,000 | As arranged | As incurred | Lodging, Transportation, and Meals |
| Rent (3 months)5 | $0 | $1,500 | As arranged | According to lease | Lessor/Landlord |
| Opening Inventory & | $8,000 | $8,000 | Lump Sum | Before opening | Pearce Bespoke |
| Equipment Package6 |  |  |  |  |  |
| Clothier Recruiting | $0 | $6,000 | Lump Sum | Before opening | Third-party |
| Services7 |  |  |  |  | suppliers |
| Clothier Inventory | $0 | $5,400 | Lump Sum | Before opening | Pearce Bespoke |
| Package8 |  |  |  |  |  |
| Uniforms9 | $500 | $3,750 | As arranged | As incurred | Pearce Bespoke |
| TYPE OF | AMOUNT |  | METHOD |  | TO WHOM |
| EXPENDITURES1 | LOW | HIGH | OF | WHEN DUE | PAYMENT IS |
|  | ESTIMATE | ESTIMATE | PAYMENT |  | TO BE MADE |
| Advertising & Marketing | $1,000 | $5,000 | As arranged | As incurred | Third-party |
| Introduction Program10 |  |  |  |  | suppliers |
| Technology Fee (3 | $300 | $300 | As arranged | As incurred | Pearce Bespoke |
| months)11 |  |  |  |  |  |
| POS System Subscription | $1,155 | $1,155 | As arranged | As incurred | Pearce Bespoke |
| Fee (3 months)12 |  |  |  |  |  |
| Computer System13 | $0 | $2,500 | Lump sum | Before opening | Third-party suppliers |
| POS System | $1,315 | $1,315 | Lump sum | Before opening | Third-party suppliers |
| Supplies14 | $350 | $1,000 | As arranged | Before training | Third-party suppliers |
| Insurance15 | $1,000 | $2,000 | As arranged | Before training | Third-party supplier |
| Licenses and Permits16 | $100 | $500 | As arranged | As incurred | Government Agencies |
| Professional Fees17 | $0 | $5,000 | As arranged | Before opening | Third-party suppliers |
| Vehicle Lease18 | $0 | $1,500 | As incurred | Before opening | Third-party suppliers |
| Additional Funds – 3 Months19 | $0 | $20,000 | As incurred | As incurred | Employees or third-party suppliers |
| TOTAL | $42,919 | $128,320 |  |  |  |
|  |  |  |  |  |  |
|  |  |  |  |  |  |

Question 12

How does the Pearce Bespoke initial franchise fee (Item 5) compare to the ongoing fees (Item 6) and the total estimated initial investment (Item 7)?

Accepted Answer

o be disclosed in this Item.

#### **ITEM 5 INITIAL FEES**

#### **Franchise Agreement**

When you sign your Franchise Agreement, you must pay to us the initial franchise fee ("Franchise Fee") of \$55,900, for a Franchised Territory with a population of between 50,000 to 200,000 people or \$29,000 for a Franchised Territory with a population of no more than 50,000 people. The Franchise Fee is due upon the signing of our Franchise Agreement and is considered fully earned by Pearce Bespoke upon payment. The Franchise Fee includes your license to operate the Franchise. This Franchise Fee is not refundable, in whole or in part, under any circumstances. The initial Franchise Fee is calculated and applied uniformly to all our franchisees. The method we use to calculate the Franchise Fee is uniform for all franchises that we offer through this Disclosure Document.

#### **Development Agreement**

Pearce Bespoke If we determine that you are financially and operationally qualified to develop multiple Franchises, we may offer you the opportunity to enter into a Development Agreement, in which you will commit to develop a certain number of Franchises that we determine to be appropriate. We have the right to determine the number of Franchises that we deem as appropriate in our sole and absolute discretion, based upon several factors, such as but not limited to, territory availability, your business acumen, your financial wherewithal, your ability to fund or obtain funding for your Franchise, and your overall business and operational experience. If you enter into a Development Agreement, you must pay us a one- time development fee

2025 FDD 9

upon execution of your Development Agreement ("Development Fee"). Your Development Fee will depend on the number of Franchises we grant you the right to open within the Development Area, and is calculat

Question 13

How does the Pearce Bespoke initial franchise fee (Item 5) compare to the travel and living expenses for training (Item 7)?

Accepted Answer

| TYPE OF | AMOUNT |  | METHOD |  | TO WHOM |
|---|---|---|---|---|---|
| EXPENDITURES1 | LOW | HIGH | OF | WHEN DUE | PAYMENT IS |
|  | ESTIMATE | ESTIMATE | PAYMENT |  | TO BE MADE |
| Initial Franchise Fee2 | $29,000 | $55,900 | Lump sum | When you sign the Franchise Agreement | Pearce Bespoke |
| Travel and Living Expenses For Training3 | $199 | $2,500 | As arranged | As incurred | Lodging, Transportation, and Meals |

Question 14

How does the Pearce Bespoke initial franchise fee in Item 5 relate to the ongoing fees described in Item 6?

Accepted Answer

When you sign your Franchise Agreement, you must pay to us the initial franchise fee ("Franchise Fee") of $55,900, for a Franchised Territory with a population of between 50,000 to 200,000 people or $29,000 for a Franchised Territory with a population of no more than 50,000 people.

| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| 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. |
| Local Marketing                  | Minimum 5% of your Gross                | Minimum amount must be           | See Note 5 below. See Note 6 below                                             |
| Transfer Fee                     | Whichever is greater:                      | Before completion of             | Subject to state law                                                                       |
|  | (i) | transfer |  |
|  | $10,000 |  |  |
|  | or |  |  |
|  | (ii) |  |  |
|  | 25% of |  |  |
|                                     | the then current franchise                       |                                        | We will not charge Transfer Fee for                                                        |
|                                     | fee                                              |                                        | transfers to immediate family.                                                             |
| Renewal Fee                      | Whichever is greater:                      | 30 days before renewal of     | See Item 17(b). If you fail to timely                                             |
|  | (i) | Franchise Agreement | meet any of the renewal conditions |
|  | $5,000, |  |  |
|  | or |  |  |
|  | (ii) |  |  |
|  | 25% of |  |  |
|  | the then current franchise |  | within the applicable timeframes, we |
|  | fee |  |  |
| Technology Fee                   | The fee is currently $25            | Due at the same time as | See Note 8                                                                           |
|  | per | Royalty Fees |  |
|  | week, |  |  |
| Point-Of-Sale | Currently | Monthly | This is a pass-through expense. We |
|  | $385. |  |  |

Question 15

What is the range of the initial franchise fee for Pearce Bespoke (Item 5) and how does it relate to the population size of the franchised territory described in Item 12?

Accepted Answer

FEES**

#### **Franchise Agreement**

When you sign your Franchise Agreement, you must pay to us the initial franchise fee ("Franchise Fee") of \$55,900, for a Franchised Territory with a population of between 50,000 to 200,000 people or \$29,000 for a Franchised Territory with a population of no more than 50,000 people. The Franchise Fee is due upon the signing of our Franchise Agreement and is considered fully earned by Pearce Bespoke upon payment. The Franchise Fee includes your license to operate the Franchise. This Franchise Fee is not refundable, in whole or in part, under any circumstances. The initial Franchise Fee is calculated and applied uniformly to all our franchisees. The method we use to calculate the Franchise Fee is uniform for all franchises that we offer through this Disclosure Document.

#### **Development Agreement**

Pearce Bespoke If we determine that you are financially and operationally qualified to develop multiple Franchises, we may offer you the opportunity to enter into a Development Agreement, in which you will commit to develop a certain number of Franchises that we determine to be appropriate.

Question 16

Are there any anticipated material differences between the represented outlets and future Pearce Bespoke franchise outlet operations?

Accepted Answer

The basis for inclusion of this Financial Performance Representation is the affiliate-owned and franchised outlets represented below are similar to the franchise being offered under this Disclosure Document in terms of operations and product offerings. There are no material financial or operational characteristics of the represented affiliate-owned and franchised outlets that are reasonably anticipated to differ materially from future franchise outlet operations.

Written substantiation for the financial performance representation will be made available to the prospective franchisee upon request.

**Some outlets have earned this amount. Your individual results may differ. There is no assurance that you'll earn as much.**

Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 35–36)

Question 17

What are the two options for calculating the Transfer Fee for a Pearce Bespoke franchise?

Accepted Answer

| Type of Fee                   | Amount                                           | Due Date                            | Remarks                                                                                    |
|-------------------------------------|--------------------------------------------------|----------------------------------------|--------------------------------------------------------------------------------------------|
| Contribution                        |                                                  | implementation                         | we reserve the right to implement                                                          |
|                                     |                                                  |                                        | one in the future, implemented by                                                          |
|                                     |                                                  |                                        | Pearce Bespoke or the franchisees.                                                         |
| Local Marketing                  | Minimum 5% of your Gross                | Minimum amount must be           | See Note 5 below. See Note 6 below                                             |
| Expenses                            | Sales                                            | spent during each calendar             |                                                                                            |
|                                     |                                                  | year.                                  | We reserve the right to increase to a                                                      |
|                                     |                                                  |                                        | maximum of 6% upon 30 days'                                                                |
|                                     |                                                  |                                        | written notice                                                                             |
| Transfer Fee                     | Whichever is greater:                      | Before completion of             | Subject to state law                                                                       |
|  | (i) | transfer |  |
|  | \$10,000 |  |  |
|  | or |  |  |
|  | (ii) |  |  |
|  | 25% of |  |  |
|                                     | the then current franchise                       |                                        | We will not charge Transfer Fee for                                                        |
|                                     | fee

Source: Item 6 — OTHER FEES (FDD pages 11–15)

Question 18

What types of businesses will Pearce Bespoke franchisees likely compete with?

Accepted Answer

The market for custom tailored men and women's clothing and accessories is well developed, competitive, and continues to expand as consumers recognize the value associated with these custom items. As a result, you will face significant competition, both directly and indirectly, from similar mobile custom clothing competitors. You will likely also compete with other retail custom clothing shops, on-line sales, and similar clothing websites. Pearce Bespoke and its franchisees will likely face increased competition as additional competitors enter the market. Several of these competitors are regional or national systems selling custom clothing and related accessories. Several of these competitors may have significantly greater financial resources than Pearce Bespoke and you.

Source: Item 1 — THE FRANCHISOR AND ANY PARENTS, PREDECESSORS AND AFFILIATES (FDD pages 7–8)

Question 19

What must happen to any existing restrictions recorded against a Pearce Bespoke franchisee's real estate for them to obtain SBA financial assistance?

Accepted Answer

- 4. If Franchisee owns the real estate where the Franchised Business operates, Franchisor has not and will not during the Term of the Franchise Agreement record against the real estate any restrictions on the use of the property, including any restrictive covenants, branding covenants or environmental indemnification, control or use restrictions. If any such restrictions are currently recorded against Franchisee's real estate, they must be removed in order for Franchisee to obtain SBA financial assistance.

Source: Item 22 — CONTRACTS (FDD page 39)

Question 20

According to the Pearce Bespoke franchise agreement, what options does a party have if a claim, counterclaim, or defense is asserted that is considered non-arbitrable for public policy reasons after arbitration has begun?

Accepted Answer

If, after Franchisor or Franchisee institutes an arbitration proceeding, one or the other asserts a claim, counterclaim or defense, the subject matter of which, under statute or current judicial decision is non-arbitrable for public policy reasons, the party against whom the claim, counterclaim, or defense is asserted may elect to proceed with the arbitration of all arbitrable claims, counterclaims, or defenses or to proceed to litigate all claims, counterclaims, or defenses in a court having competent jurisdiction.

Source: Item 22 — CONTRACTS (FDD page 39)

Question 21

According to the Hawaii addendum, when is a Pearce Bespoke franchisee required to pay the initial franchise fee if the franchisor's liabilities exceed its assets?

Accepted Answer

SINCE THE FRANCHISOR'S AUDITED FINANCIAL STATEMENTS, AS OF

Source: Item 22 — CONTRACTS (FDD page 39)

Question 22

According to Indiana law, what is the effect of the addendum on provisions in the Pearce Bespoke Franchise Agreement that are inconsistent with the Indiana Deceptive Franchise Practices Act?

Accepted Answer

The Indiana Securities Commissioner requires that certain provisions contained in franchise documents be amended to be consistent with Indiana law, including the Indiana Franchises Act, Ind. Code Ann. §§ 1 - 51 (1994) and the Indiana Deceptive Franchise Practices Act, Ind. Code Ann. § 23-2-2.7 (1985) (collectively referred to as the "Acts"). To the extent that (a) the jurisdictional requirements of the Acts are met and (b) this Franchise Disclosure Document and Franchise Agreement contain provisions that are inconsistent with the following, such provisions are hereby amended:

- (a) To the extent the Franchise Agreement contains provisions allowing the establishment of franchisor-owned outlets that are inconsistent with the Indiana Deceptive Franchise Practices Act § 23-2-2.7(2), the requirements of this section of the Indiana Act will control.
- (b) The franchisor may not make any substantial modification of the Franchise Agreement without the franchisee's written consent.
- (c) To the extent any provision regarding renewal or termination of the Franchise Agreement is inconsistent with the Indiana Deceptive Franchise Practices Act §§ 23-2-2.7(7) and (8), the provisions of these sections of the Indiana Act will control.
- (d) Any requirement in the Franchise Agreement that requires the franchisee to prospectively assent to a release, assignment, novation, wavier or estoppel shall not relieve any person from liability arising under the Acts.
- (e) To the extent the covenants not to compete upon expiration or termination of the Franchise Agreement are inconsistent with the Indiana Deceptive Franchise Practices Act § 23-2-2.7(9), the provisions of this section of the Indiana Act will control.
- (f) To the extent that any provision of the Franchise Agreement would be deemed unenforceable pursuant to the Indiana Deceptive Franchise Practices Act § 23-2-2.7(10), as this section of the Indiana Act is interpreted and applied, such provision of the Franchise Agreement shall be so deleted therefrom.

Source: Item 22 — CONTRACTS (FDD page 39)

Question 23

According to the Maryland addendum, what happens if a provision in the Pearce Bespoke Franchise Agreement is inconsistent with Maryland Franchise Law?

Accepted Answer

The Office of Attorney General for the State of Maryland requires that certain provisions contained in franchise documents be amended to be consistent with Maryland Franchise Registration and Disclosure Law, Md. Code Ann., Bus. Reg. § 14-201 et seq., and of the Rules and Regulations promulgated under the Act (collectively the "Maryland Franchise Law"). To the extent that this Disclosure Document or Franchise Agreement contains provisions that are inconsistent with the following, such provisions are hereby amended:

1. No requirement that you agree to any release, assignment, novation, estoppel or waiver of liability as a condition to your purchasing a Pearce Bespoke franchise shall act as a release, estoppel or waiver of any liability under the Maryland Franchise Law.

#### 2. Item 17 is amended to state:

- (a) Any claims arising under the Maryland Franchise Law must be brought within three (3) years after the grant of the franchise.
- (b) Any general release required by the terms and conditions of the Franchise Agreement as a condition of renewal, assignment or transfer shall not apply to any liability under the Maryland Franchise Law.
- (c) Our right to terminate you upon your bankruptcy may not be enforceable under federal bankruptcy law (11 U.S.C. §101 *et. seq*.).
- (d) Nothing herein shall waive your right to file a lawsuit alleging a cause of action arising under the Maryland Franchise Law in any court of competent jurisdiction in the State of Maryland.

Source: Item 22 — CONTRACTS (FDD page 39)

Question 24

According to the Maryland addendum, what specific documents are subject to amendment if they contain provisions inconsistent with Maryland Franchise Law regarding the Pearce Bespoke franchise?

Accepted Answer

To the extent of any inconsistencies with the Maryland Franchise Registration and Disclosure Law contained in this Disclosure Document or the Franchise Agreement, such inconsistent provisions are hereby deleted.

Source: Item 22 — CONTRACTS (FDD page 39)

Question 25

According to the Maryland amendment, what must Pearce Bespoke do before requiring the franchisee to pay the initial franchise fee?

Accepted Answer

Section 4 of the Franchise Agreement relating the payment of the Initial Franchise fee is hereby amended to state that the Franchisor will defer collection of the Initial Franchise Fee until Franchisor has fulfilled its initial pre-opening obligations and Franchisee may open for business.

Source: Item 22 — CONTRACTS (FDD page 39)

Question 26

According to the Rhode Island addendum, can a Pearce Bespoke franchisee sue Pearce Bespoke in Rhode Island for claims arising under the Rhode Island Franchise Investment Act?

Accepted Answer

In recognition of the requirements of the Rhode Island Franchise Investment Act, the Franchise Disclosure Document of The Tox Franchising Group, LLC ("we," "us," or "our") for use in the State of Rhode Island shall be amended to include the following:

1. Items 17v. and 17w., under the provisions entitled "Choice of law" and "Choice of forum," shall be supplemented with the following language:

> However, you may sue us in Rhode Island for claims arising under the Rhode Island Franchise Investment Act.

2. Item 17 shall be supplemented by the addition of the following language at the end of Item 17:

> Section 19-28.1-14 of the Rhode Island Franchise Investment Act provides that "A provision in a franchise agreement restricting jurisdiction or venue to a forum outside this state or requiring the application of the laws of another state is void with respect to a claim otherwise enforceable under this Act."

3. Each provision of this Addendum to the Disclosure Document shall be effective only to the extent, with respect to such provision, that the jurisdictional requirements of the Rhode Island Franchise Investment Act are met independently without reference to this Addendum to the Disclosure Document.

Source: Item 22 — CONTRACTS (FDD page 39)

Question 27

According to the Virginia addendum, what happens to a provision in the Pearce Bespoke Franchise Agreement that involves undue influence?

Accepted Answer

Pursuant to Section 13.1-564 of the Virginia Retail Franchising Act, it is unlawful for a Franchisor to use undue influence to induce a franchisee to surrender any right given to him under the franchise. If any provision of the Franchise Agreement involves the use of undue influence by the franchisor to induce a franchisee to surrender any rights given to him under the franchise, that provision may not be enforceable.

Source: Item 22 — CONTRACTS (FDD page 39)

Question 28

What action must a Pearce Bespoke franchisee take if they are solicited by a customer outside their territory?

Accepted Answer

You may not advertise, market, solicit, sell, or service customers outside your Franchised Territory ("Non-Exclusive Customers"), unless you are solicited or have a prior verifiable relationship with the Non-Exclusive Customer. Even if you sell to a Non-Exclusive Customer, you must pay us or the incumbent franchise owner an encroachment fee of twenty percent (20%) of the Gross Sales attributed to the Non-Exclusive Customers sales outside of your Franchised Territory ("Encroachment Fee").

Source: Item 12 — TERRITORY (FDD pages 27–29)

Question 29

Does the Pearce Bespoke addendum to the FDD void provisions requiring the application of laws of another state?

Accepted Answer

the provisions entitled "Choice of law" and "Choice of forum," shall be supplemented with the following language:

> However, you may sue us in Rhode Island for claims arising under the Rhode Island Franchise Investment Act.

2. Item 17 shall be supplemented by the addition of the following language at the end of Item 17:

> Section 19-28.1-14 of the Rhode Island Franchise Investment Act provides that "A provision in a franchise agreement restricting jurisdiction or venue to a forum outside this state or requiring the application of the laws of another state is void with respect to a claim otherwise enforceable under this Act."

3.

Source: Item 22 — CONTRACTS (FDD page 39)

Question 30

Does the Pearce Bespoke addendum to the FDD void provisions restricting jurisdiction or venue to a forum outside of Rhode Island?

Accepted Answer

LLC FRANCHISE DISCLOSURE DOCUMENT REQUIRED BY THE STATE OF RHODE ISLAND**

In recognition of the requirements of the Rhode Island Franchise Investment Act, the Franchise Disclosure Document of The Tox Franchising Group, LLC ("we," "us," or "our") for use in the State of Rhode Island shall be amended to include the following:

1. Items 17v. and 17w., under the provisions entitled "Choice of law" and "Choice of forum," shall be supplemented with the following language:

> However, you may sue us in Rhode Island for claims arising under the Rhode Island Franchise Investment Act.

2. Item 17 shall be supplemented by the addition of the following language at the end of Item 17:

> Section 19-28.1-14 of the Rhode Island Franchise Investment Act provides that "A provision in a franchise agreement restricting jurisdiction or venue to a forum outside this state or requiring the application of the laws of another state is void with respect to a claim otherwise enforceable under this Act."

3. Each provision of this Addendum to the Disclosure Document shall be effective only to the extent, with respect to such provision, that the jurisdictional requirements of the Rhode Island Franchise Investment Act are met independently without reference to this Addendum to the Disclosure Document.

**[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]**

#### **AMENDMENT TO THE THE PEARCE BESPOKE FRANCHISING LLC FRANCHISE AGREEMENT REQUIRED BY THE STATE OF RHODE ISLAND**

In recognition of the requirements of the Rhode Island Franchise Investment Act, the parties to the attached The Tox Franchising Group, LLC Franchise Agreement (the "Franchise Agreement") agree as follows:

1. The following language shall be added at the end of Section 20.3 of the Franchise Agreement:

Notwithstanding the above, Rhode Island franchisees are permitted to bring a lawsuit in Rhode Island for claims arising under the Rhode Island Franchise Investment Act.

2.

Source: Item 22 — CONTRACTS (FDD page 39)

Question 31

What is the alternative calculation for the Pearce Bespoke Transfer Fee, based on the then-current franchise fee?

Accepted Answer

| Type of Fee                   | Amount                                           | Due Date                            | Remarks                                                                                    |
|-------------------------------------|--------------------------------------------------|----------------------------------------|--------------------------------------------------------------------------------------------|
| Contribution                        |                                                  | implementation                         | we reserve the right to implement                                                          |
|                                     |                                                  |                                        | one in the future, implemented by                                                          |
|                                     |                                                  |                                        | Pearce Bespoke or the franchisees.                                                         |
| Local Marketing                  | Minimum 5% of your Gross                | Minimum amount must be           | See Note 5 below. See Note 6 below                                             |
| Expenses                            | Sales                                            | spent during each calendar             |                                                                                            |
|                                     |                                                  | year.                                  | We reserve the right to increase to a                                                      |
|                                     |                                                  |                                        | maximum of 6% upon 30 days'                                                                |
|                                     |                                                  |                                        | written notice                                                                             |
| Transfer Fee                     | Whichever is greater:                      | Before completion of             | Subject to state law                                                                       |
|  | (i) | transfer |  |
|  | \$10,000 |  |  |
|  | or |  |  |
|  | (ii) |  |  |
|  | 25% of |  |  |
|                                     | the then current franchise                       |                                        | We will not charge Transfer Fee for                                                        |
|                                     | fee

Source: Item 6 — OTHER FEES (FDD pages 11–15)

Question 32

Where must arbitration proceedings take place for a Pearce Bespoke franchise in North Dakota?

Accepted Answer

- 2. To the extent required by the NDFIL, arbitration proceedings shall take place at a location mutually agreed upon by you and us.

Source: Item 22 — CONTRACTS (FDD page 39)

Question 33

Who bears the expense of changes to the marks required by Pearce Bespoke due to a superior rights claim?

Accepted Answer

If any party claims that its rights to use any of the Marks are superior and Pearce Bespoke confirms that claim, you must, at your expense, immediately make the changes and use the substitutions to the Marks as Pearce Bespoke requires.

Source: Item 13 — TRADEMARKS (FDD page 29)

Question 34

What is the condition for Pearce Bespoke to exercise its option to purchase or its right of first refusal regarding a partial interest in the Franchised Business?

Accepted Answer

- 1. With respect to a partial interest in the Franchised Business, Franchisor may exercise its option to purchase or its right of first refusal only if the proposed transferee is not a current owner or family member of a current owner of Franchisee.

Source: Item 22 — CONTRACTS (FDD page 39)

Question 35

What is the condition for the high estimate for the Clothier Inventory Package for a Pearce Bespoke franchise?

Accepted Answer

oarding, depending on candidate availability.
- 8. Clothier Inventory Package. This fee estimates the costs associated with purchasing our signature trunk, a set of fabric, and lining sample books. The low estimate assumes you are the operator and have already purchased the Opening Inventory & Equipment Package. The high estimate is assuming you hire two clothiers, you will be required to purchase the \$2,700 Inventory Package for each.
- 9. Uniforms. This estimate includes the costs associated with purchasing five suits from us (at cost) for each operator/clothier. The low estimate assumes you will be the sole operator/clothier of your Franchise. The high estimate is based upon you hiring two clothiers and purchasing five suits for each.
- 10.

Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 15–19)

Question 36

What is the condition for the high estimate for the Clothier Recruiting Package for a Pearce Bespoke franchise?

Accepted Answer

The low estimate assumes that use our approved vendor to assist in recruiting potential clothiers to operate your Franchise.

The high estimate includes all the cost associated with such services.

The estimated timeframe for recruiting is 7 to 21 days.

This includes approximately one week to set up the job posting, conduct interviews, and make a hire, followed by up to two additional weeks for training and onboarding, depending on candidate availability.

Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 15–19)

Question 37

What is the condition for the high estimate for On-Site Training for a Pearce Bespoke franchise?

Accepted Answer

On-Site Training. Prior to opening your Franchise, you must successfully complete the required training programs. The low estimate assumes you will travel to our Training Facility in Baton Rouge, Louisiana. The high estimate is based on a request that we conduct training at your location, in which case you will be responsible for our expenses associated with travel, lodging, and other reasonable costs that we incur. Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 15–19)

Question 38

What is the condition for the high estimate for the Uniforms for a Pearce Bespoke franchise?

Accepted Answer

- 9.

Uniforms.

This estimate includes the costs associated with purchasing five suits from us (at cost) for each operator/clothier.

The low estimate assumes you will be the sole operator/clothier of your Franchise.

The high estimate is based upon you hiring two clothiers and purchasing five suits for each.

Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 15–19)

Question 39

What is the condition for Pearce Bespoke to increase the Local Marketing Expenses percentage?

Accepted Answer

etition covenants in the Franchise Agreement |
| Type of Fee                   | Amount                                           | Due Date                            | Remarks                                                                                    |
|-------------------------------------|--------------------------------------------------|----------------------------------------|--------------------------------------------------------------------------------------------|
| Contribution                        |                                                  | implementation                         | we reserve the right to implement                                                          |
|                                     |                                                  |                                        | one in the future, implemented by                                                          |
|                                     |                                                  |                                        | Pearce Bespoke or the franchisees.                                                         |
| Local Marketing                  | Minimum 5% of your Gross                | Minimum amount must be           | See Note 5 below. See Note 6 below                                             |
| Expenses                            | Sales                                            | spent during each calendar             |                                                                                            |
|                                     |                                                  | year.

Source: Item 6 — OTHER FEES (FDD pages 11–15)

Question 40

What is the condition for the low estimate for the Clothier Inventory Package for a Pearce Bespoke franchise?

Accepted Answer

d onboarding, depending on candidate availability.
- 8. Clothier Inventory Package. This fee estimates the costs associated with purchasing our signature trunk, a set of fabric, and lining sample books. The low estimate assumes you are the operator and have already purchased the Opening Inventory & Equipment Package. The high estimate is assuming you hire two clothiers, you will be required

Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 15–19)

Question 41

What is the condition for the low estimate for the Clothier Recruiting Package for a Pearce Bespoke franchise?

Accepted Answer

Clothier Recruiting Package.

The low estimate assumes that use our approved vendor to assist in recruiting potential clothiers to operate your Franchise.

The high estimate includes all the cost associated with such services.

The estimated timeframe for recruiting is 7 to 21 days.

This includes approximately one week to set up the job posting, conduct interviews, and make a hire, followed by up to two additional weeks for training and onboarding, depending on candidate availability.

Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 15–19)

Question 42

What is the condition for the low estimate for On-Site Training for a Pearce Bespoke franchise?

Accepted Answer

On-Site Training4 | $0 | $5,000 | As arranged | As incurred | Lodging, Transportation, and Meals | - 4. On-Site Training. Prior to opening your Franchise, you must successfully complete the required training programs. The low estimate assumes you will travel to our Training Facility in Baton Rouge, Louisiana. The high estimate is based on a request that we conduct training at your location, in which case you will be responsible for our expenses associated with travel, lodging, and other reasonable costs that we incur. Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 15–19)

Question 43

What is the condition for the low estimate for the Uniforms for a Pearce Bespoke franchise?

Accepted Answer

- 9.

Uniforms.

This estimate includes the costs associated with purchasing five suits from us (at cost) for each operator/clothier.

The low estimate assumes you will be the sole operator/clothier of your Franchise.

The high estimate is based upon you hiring two clothiers and purchasing five suits for each.

Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 15–19)

Question 44

What condition regarding Pearce Bespoke's financial condition triggers the requirement for a surety bond in Illinois?

Accepted Answer

| 7. | Based upon Franchisor's financial condition, the Illinois Office of the Attorney General       |
|----|------------------------------------------------------------------------------------------------|
|    | has required a Surety Bond be executed and on file with them in the amount of the initial (and |
|    | development) fee multiplied by the number of franchises to be sold in Illinois.                |

Source: Item 22 — CONTRACTS (FDD page 39)

Question 45

What are the conditions under which a Pearce Bespoke franchisee can terminate the Franchise Agreement?

Accepted Answer

| Provision |  | Section in Franchise | Summary |
|---|---|---|---|
| d. | Termination by you | Section 16(A) | If you are complying with the Franchise Agreement, and Pearce Bespoke fails to cure a material default within 30 days after Pearce Bespoke’s receipt of written notice, subject to state law.

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP (FDD pages 31–34)

Question 46

What is the consequence if a Pearce Bespoke franchisee fails to meet the Minimum Royalty Payment?

Accepted Answer

You are required to make certain minimum weekly royalty paymentsto retain the Franchised Territory under the Franchise Agreement ("Minimum Royalty Payment(s)"). Following the execution of the Franchise Agreement, the Minimum Royalty Payment schedule is as follows:

Source: Item 12 — TERRITORY (FDD pages 27–29)

Question 47

Can the cost of Pearce Bespoke certification or recertification change?

Accepted Answer

anchisee's location, and Franchisee will be responsible for reimbursing Franchisor for the transportation costs, lodging costs, and other costs reasonably related to training at Franchisee's location, up to \$5,000. Franchise and or all active clothiers working with Franchise are also required to attend Franchisor's certification training (the "Certification Train

Source: Item 22 — CONTRACTS (FDD page 39)

Question 48

What is the cost of the Clothier Inventory Package if you are the operator and have already purchased the Opening Inventory & Equipment Package for a Pearce Bespoke franchise?

Accepted Answer

d onboarding, depending on candidate availability.
- 8. Clothier Inventory Package. This fee estimates the costs associated with purchasing our signature trunk, a set of fabric, and lining sample books. The low estimate assumes you are the operator and have already purchased the Opening Inventory & Equipment Package. The high estimate is assuming you hire two clothiers, you will be required

Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 15–19)

Question 49

Can Pearce Bespoke deny a franchisee access to other benefits funded by the Brand Fund if they are in default of their obligations?

Accepted Answer

In implementing the Brand Fund, Franchisor has the right to spend in any fiscal year an amount greater or less than the aggregate contributions to the Fund in that year, and the Brand Fund may borrow from Franchisor or other lenders to cover Fund deficits. Franchisor can accumulate funds over time until such time as Franchisor determines in its sole discretion that sufficient funds are available to adequately conduct Fund activities as contemplated herein. Franchisor can cause the Fund to invest any surplus. Franchisor may, in its sole discretion, defer, waive and/or compromise claims for contributions to, and/or claims against or with respect to, the Fund and take legal or other action against any franchisee in default of its obligations and/or deny it access to programs, materials and/or other benefits funded by the Brand Fund. Franchisee acknowledges and agrees that Franchisor has no obligation to ensure that expenditures by the Brand Fund are or will be proportionate or equivalent to contributions to the Fund by franchisees operating in any geographic area, or that any franchisee will benefit directly, indirectly or in proportion to its contribution to the Fund. Any interest earned on Fund contributions will be remitted to the Brand Fund. Franchisor and its affiliates will not be liable for any act or omission in connection with the Brand Fund that is consistent with this Agreement. You acknowledge that the Brand Fund is not a "trust," and does not create and is not in the nature of a "fiduciary" or similar special arrangement.

Source: Item 22 — CONTRACTS (FDD page 39)

Question 50

Can Pearce Bespoke deny a franchisee access to materials funded by the Brand Fund if they are in default of their obligations?

Accepted Answer

In implementing the Brand Fund, Franchisor has the right to spend in any fiscal year an amount greater or less than the aggregate contributions to the Fund in that year, and the Brand Fund may borrow from Franchisor or other lenders to cover Fund deficits. Franchisor can accumulate funds over time until such time as Franchisor determines in its sole discretion that sufficient funds are available to adequately conduct Fund activities as contemplated herein. Franchisor can cause the Fund to invest any surplus. Franchisor may, in its sole discretion, defer, waive and/or compromise claims for contributions to, and/or claims against or with respect to, the Fund and take legal or other action against any franchisee in default of its obligations and/or deny it access to programs, materials and/or other benefits funded by the Brand Fund. Franchisee acknowledges and agrees that Franchisor has no obligation to ensure that expenditures by the Brand Fund are or will be proportionate or equivalent to contributions to the Fund by franchisees operating in any geographic area, or that any franchisee will benefit directly, indirectly or in proportion to its contribution to the Fund. Any interest earned on Fund contributions will be remitted to the Brand Fund. Franchisor and its affiliates will not be liable for any act or omission in connection with the Brand Fund that is consistent with this Agreement. You acknowledge that the Brand Fund is not a "trust," and does not create and is not in the nature of a "fiduciary" or similar special arrangement.

Source: Item 22 — CONTRACTS (FDD page 39)

Question 51

What is the dependency between compliance with brand requirements and opening additional Pearce Bespoke businesses?

Accepted Answer

Prior to opening additional Businesses in your Development Area, you must: (i) possess sufficient financial and organizational capacity to develop, open, operate, and manage each additional Mobile Franchise in our reasonable judgment; (ii) be in full compliance with all brand requirements at any existing Businesses you operate; and (iii) be in compliance with any Franchise Agreement or any other agreement entered into with us.

Source: Item 23 — RECEIPTS (FDD pages 39–172)

Question 52

What is the dependency between compliance with existing agreements and opening additional Pearce Bespoke businesses?

Accepted Answer

- **3.1 Development Schedule**. You must enter into Franchise Agreements, and open and operate Businesses in accordance with the deadlines set forth in the Development Schedule. By each "Opening Deadline" specified in the Development Schedule, you must have the specified number of Businesses open and operating. Prior to opening additional Businesses in your Development Area, you must: (i) possess sufficient financial and organizational capacity to develop, open, operate, and manage each additional Mobile Franchise in our reasonable judgment; (ii) be in full compliance with all brand requirements at any existing Businesses you operate; and (iii) be in compliance with any Franchise Agreement or any other agreement entered into with us.

Source: Item 23 — RECEIPTS (FDD pages 39–172)

Question 53

What is the dependency between cooperative advertising programs and local marketing expenditures for a Pearce Bespoke franchisee?

Accepted Answer

To the extent Franchisee's annual contributions to cooperative advertising programs described in Section 6(A) above are less than five percent (5%) of the Gross Sales for the Pearce Bespoke Franchise, or if the Franchisee cannot participate in any regional cooperative advertising program because such a program has not been established in Franchisee's geographic area, Franchisee will then be obligated to conduct advertising and marketing activities in Franchisee's local geographic area; provided that Franchisee's local marketing activities will not reduce, eliminate, or otherwise impact Franchisee's obligations under Section 6(A) above. Franchisee's local marketing expenditures will include advertising, merchandising, sales promotion, and other forms of marketing at the local level.

Within thirty (30) days following the end of each calendar quarter, Franchisee will provide Franchisor with an accounting of the monies that it has spent for approved regional cooperative advertising and local marketing for the preceding calendar quarter. If Franchisee has failed to spend at least five percent (5%) of its Gross Sales for the calendar quarter for approved regional cooperative advertising or local marketing, Franchisee may be required to deposit with Franchisor the difference between what it should have spent for advertising and marketing during the calendar quarter and what it actually spent for advertising and marketing during the calendar quarter. Franchisor will spend such amount for any type of advertising or marketing that Franchisor deems appropriate for Franchisee's business, although Franchisor will use reasonable efforts to spend such amounts in Franchisee's local geographic area.

Source: Item 22 — CONTRACTS (FDD page 39)

Question 54

What is the dependency between the Development Schedule and Pearce Bespoke's obligation to not operate or license others?

Accepted Answer

#### **4. Development Area** - **4.1 Development Area**.Except as provided in this Section 4.1, while this Agreement is in effect, provided that you open and operate the Businesses in accordance with the Development Schedule and the minimum number of Businesses that you have open and operating in the Development Area at any given time is not less than the minimum required pursuant to the Development Schedule, we will not operate, or license any person other than you to operate, a Mobile Franchise under the Marks (as defined in your Initial Franchise Agreement) and the System (as defined in your Initial Franchise Agreement) within the Development Area. Each Mobile Franchise you open will be granted a protected territory as set forth in the individual Franchise Agreement for that Business. This Agreement does not give you the right open or operate in any portions of the Development Area until you have signed a new Franchise Agreement which includes that portion of the Development Area as your protected territory. Source: Item 23 — RECEIPTS (FDD pages 39–172)

Question 55

How is the Pearce Bespoke Development Fee calculated if more than six franchises are permitted under the Development Agreement?

Accepted Answer

9,500 |
| 6 | $30,900 | $260,400 |
If we permit you to open more than six (6) Franchises under a Development Agreement, your Development Fee will be equal to (i) \$260,400, plus (ii) \$30,900 for each additional Franchise that we grant you the right to develop. You will be required to enter into our then current form of Franchise Agreement for each Franchise that you wish to open under your Development Agreement, but you will not be required to pay any additional initial franchise fee at the time you execute each of these franchise agreements. If you enter into a Development Agreement, you must execute our current form of franchise agreement for the initial Franchise we grant you the right to open within your Development Area, concurren

Source: Item 5 — INITIAL FEES (FDD pages 9–11)

Question 56

Are the estimated costs for licenses and permits for a Pearce Bespoke franchise fixed?

Accepted Answer

| TYPE OF | AMOUNT |  | METHOD |  | TO WHOM |
|---|---|---|---|---|---|
| EXPENDITURES1 | LOW | HIGH | OF | WHEN DUE | PAYMENT IS |
|  | ESTIMATE | ESTIMATE | PAYMENT |  | TO BE MADE |
| Initial Franchise Fee2 | $29,000 | $55,900 | Lump sum | When you sign the Franchise Agreement | Pearce Bespoke |
| Travel and Living Expenses For Training3 | $199 | $2,500 | As arranged | As incurred | Lodging, Transportation, and Meals |
| On-Site Training4 | $0 | $5,000 | As arranged | As incurred | Lodging, Transportation, and Meals |
| Rent (3 months)5 | $0 | $1,500 | As arranged | According to lease | Lessor/Landlord |
| Opening Inventory & | $8,000 | $8,000 | Lump Sum | Before opening | Pearce Bespoke |
| Equipment Package6 |  |  |  |  |  |
| Clothier Recruiting | $0 | $6,000 | Lump Sum | Before opening | Third-party |
| Services7 |  |  |  |  | suppliers |
| Clothier Inventory | $0 | $5,400 | Lump Sum | Before opening | Pearce Bespoke |
| Package8 |  |  |  |  |  |
| Uniforms9 | $500 | $3,750 | As arranged | As incurred | Pearce Bespoke |
| TYPE OF | AMOUNT |  | METHOD |  | TO WHOM |
| EXPENDITURES1 | LOW | HIGH | OF | WHEN DUE | PAYMENT IS |
|  | ESTIMATE | ESTIMATE | PAYMENT |  | TO BE MADE |
| Advertising & Marketing | $1,000 | $5,000 | As arranged | As incurred | Third-party |
| Introduction Program10 |  |  |  |  | suppliers |
| Technology Fee (3 | $300 | $300 | As arranged | As incurred | Pearce Bespoke |
| months)11 |  |  |  |  |  |
| POS System Subscription | $1,155 | $1,155 | As arranged | As incurred | Pearce Bespoke |
| Fee (3 months)12 |  |  |  |  |  |
| Computer System13 | $0 | $2,500 | Lump sum | Before opening | Third-party suppliers |
| POS System | $1,315 | $1,315 | Lump sum | Before opening | Third-party suppliers |
| Supplies14 | $350 | $1,000 | As arranged | Before training | Third-party suppliers |
| Insurance15 | $1,000 | $2,000 | As arranged | Before training | Third-party supplier |
| Licenses and Permits16 | $100 | $500 | As arranged | As incurred | Government Agencies |
| Professional Fees17 | $0 | $5,000 | As arranged | Before opening | Third-party suppliers |
| Vehicle Lease18 | $0 | $1,500 | As incurred | Before opening | Third-party suppliers |
| Additional Funds – 3 Months19 | $0 | $20,000 | As incurred | As incurred | Employees or third-party suppliers |
| TOTAL | $42,919 | $128,320 |  |  |  |

Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 15–19)

Question 57

Are the estimated development costs for a Pearce Bespoke franchise applicable to additional territories beyond the first?

Accepted Answer

#### Notes: In general, none of the expenses listed in the above chart are refundable. - 1. Please see Item 5 for information on the Development Fee. - 2. These are the estimates for development of your first Franchised Business. Costs associated with additional territories are subject to factors that we cannot estimate or control, such as inflation, increased labor costs or increased materials costs. Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 15–19)

Question 58

In the event of a non-arbitrable claim arising during a Pearce Bespoke arbitration proceeding, can the party against whom the claim is asserted choose to litigate all claims in court?

Accepted Answer

If, after Franchisor or Franchisee institutes an arbitration proceeding, one or the other asserts a claim, counterclaim or defense, the subject matter of which, under statute or current judicial decision is non-arbitrable for public policy reasons, the party against whom the claim, counterclaim,
or defense is asserted may elect to proceed with the arbitration of all arbitrable claims, counterclaims, or defenses or to proceed to litigate all claims, counterclaims, or defenses in a court having competent jurisdiction.

Source: Item 22 — CONTRACTS (FDD page 39)

Question 59

In the event of SBA Financing for a Pearce Bespoke franchise, does the franchisor subordinate its security interest to the lender?

Accepted Answer

Nothing in this Section will be construed as prohibiting the shares of Capital Stock of a corporate Franchisee from being pledged as security to an institutional lender who has provided financing to or for the Pearce Bespoke Franchise; provided the institutional lender accepts such security interest subject to Franchisor's reasonable conditions. Notwithstanding the foregoing, in the event Franchisee seeks and/or obtains financing whereby funding is provided with the assistance of the United States Small Business Administration ("SBA Financing"), Franchisee shall be permitted to grant the lender of such SBA Financing a senior lien on any collateral Franchisee uses to secure the SBA Financing, and Franchisor and Franchisee further agree that (i) the provisions of Attachment D are fully incorporated herein and applicable to Franchisor and Franchisee, (ii) Franchisor shall subordinate its security interest or other lien on Franchisee's collateral to that of the lender of the SBA Financing and (iii) Franchisor waives the requirement of the written acknowledgement referenced in this Section.

Source: Item 22 — CONTRACTS (FDD page 39)

Question 60

To what extent are liquidated damages or termination penalties applicable to a Pearce Bespoke franchise in North Dakota?

Accepted Answer

- 3. Any requirement that you consent to liquidated damages or termination penalties shall not apply to the extent prohibited by the NDFIL;

Source: Item 22 — CONTRACTS (FDD page 39)

Question 61

Can a Pearce Bespoke franchisee grant a senior lien to the lender of SBA Financing on any collateral used to secure the financing?

Accepted Answer

Notwithstanding the foregoing, in the event Franchisee seeks and/or obtains financing whereby funding is provided with the assistance of the United States Small Business Administration ("SBA Financing"), Franchisee shall be permitted to grant the lender of such SBA Financing a senior lien on any collateral Franchisee uses to secure the SBA Financing, and Franchisor and Franchisee further agree that (i) the provisions of Attachment D are fully incorporated herein and applicable to Franchisor and Franchisee, (ii) Franchisor shall subordinate its security interest or other lien on Franchisee's collateral to that of the lender of the SBA Financing and (iii) Franchisor waives the requirement of the written acknowledgement referenced in this Section.

Source: Item 22 — CONTRACTS (FDD page 39)

Question 62

What must a Pearce Bespoke franchisee do if a party claims superior rights to the marks and Pearce Bespoke confirms that claim?

Accepted Answer

If any party claims that its rights to use any of the Marks are superior and Pearce Bespoke confirms that claim, you must, at your expense, immediately make the changes and use the substitutions to the Marks as Pearce Bespoke requires.

Source: Item 13 — TRADEMARKS (FDD page 29)

Question 63

Is a Pearce Bespoke franchisee obligated to pay advertising cooperative fees even if they do not participate in the cooperative?

Accepted Answer

Franchisee will participate in, support, and contribute a proportionate share, but no more than an amount equal to five percent (5%) of the Gross Sales for their Pearce Bespoke Franchise, to the cost of cooperative advertising programs designated by Franchisor. Franchisor reserves the right to designate advertising cooperative markets, to establish advertising cooperatives, and to establish the bylaws, policies, and other rules under which such cooperatives will operate. If an advertising cooperative is formed and the Franchisee does not participate, Franchisee is still obligated to pay the advertising cooperative fees required of members and to abide by the cooperative's bylaws, policies, and other rules.

Source: Item 22 — CONTRACTS (FDD page 39)

Question 64

Must a Pearce Bespoke franchisee pay an encroachment fee even if they were solicited by a Non-Exclusive Customer?

Accepted Answer

You may not advertise, market, solicit, sell, or service customers outside your Franchised Territory ("Non-Exclusive Customers"), unless you are solicited or have a prior verifiable relationship with the Non-Exclusive Customer. Even if you sell to a Non-Exclusive Customer, you must pay us or the incumbent franchise owner an encroachment fee of twenty percent (20%) of the Gross Sales attributed to the Non-Exclusive Customers sales outside of your Franchised Territory ("Encroachment Fee").

Source: Item 12 — TERRITORY (FDD pages 27–29)

Pearce_Bespoke 2025 FDD FAQ