Is the 10% royalty fee charged by Pearce Bespoke subject to a minimum royalty?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
enue is recognized upon the execution of the franchise agreement. This fee is assessed for each additional clothier added to a franchised location.
Franchise Royalties
Franchise royalties are calculated based upon either 10% of franchisee gross revenue or a minimum of $100 per week (as defined in the franchise agreement). In year 2 of operation the minimum fee will increase to $150 per we
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 39)
What This Means (2025 FDD)
According to Pearce Bespoke's 2025 Franchise Disclosure Document, the 10% royalty fee is indeed subject to a minimum royalty. Specifically, franchisees must pay either 10% of their gross revenue or a specified minimum amount, whichever is greater.
In the first year of operation, the minimum royalty is $100 per week. This minimum increases to $150 per week in the second year. By the third year and onward, the minimum weekly royalty increases again to $200 per week.
This structure means that even if a Pearce Bespoke franchise location has low sales in a particular week, the franchisee is still obligated to pay at least the minimum royalty amount. This could impact the franchisee's profitability, especially during the initial stages of the business or during slower sales periods. Prospective franchisees should carefully consider these minimum royalty obligations and factor them into their financial projections.