Is Pearce Bespoke's ability to terminate the Franchise Agreement dependent on the franchisee's default?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise | Summary | |
|---|---|---|---|
| Agreement | |||
| a. | Length of the franchise | Section 2(A) | 10 years |
| b. | Renewal or extension of the term | Section 2(B) | If you meet the renewal requirements set forth in the Franchise Agreement, you can renew the Franchise Agreement for up to two additional 5-year period(s). |
| c. | Requirements for you to renew or extend | Section 2(B) | Provide advance notice in writing, sign then current Franchise Agreement, pay renewal fee, remodel, meet all current Brand Standards, secure extension of lease and be in compliance with current Franchise Agreement during the term of the Agreement. You may be asked to sign a Franchise Agreement with materially different terms and conditions than your original Franchise Agreement. The entire provision is subject to state law. |
| 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. |
| e. | Termination by Pearce Bespoke without cause | Not Applicable | Not Applicable |
| f. | Termination by Pearce Bespoke with cause | Sections 15(A) and (B) | Pearce Bespoke can terminate the Franchise Agreement only if you default. Subject to state law. |
| g. | “Cause” defined – curable defaults | Sections 15(A) and (B) | You have 30 days to cure a violation of any material provision of the Franchise Agreement, non-payment of amounts owed to Pearce Bespoke or any applicable local advertising cooperative, failure to abide by Pearce Bespoke’s standards and requirements in operating the Franchise, an assignment of assets to creditors and the expiration or termination of the Franchise’s lease. Subject to state law. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP (FDD pages 31–34)
What This Means (2025 FDD)
According to Pearce Bespoke's 2025 Franchise Disclosure Document, Pearce Bespoke can terminate the Franchise Agreement only if the franchisee defaults. Specifically, Item 17 outlines the conditions under which Pearce Bespoke can terminate the agreement, stating that termination is 'with cause' and is contingent upon the franchisee's failure to comply with the terms of the agreement. This is a common practice in franchising, as it protects the franchisee from arbitrary termination while also allowing the franchisor to maintain brand standards and protect the system.
The FDD also defines what constitutes 'cause' for termination, including both curable and non-curable defaults. Curable defaults include violations of any material provision of the Franchise Agreement, non-payment of amounts owed to Pearce Bespoke or any applicable local advertising cooperative, failure to abide by Pearce Bespoke’s standards and requirements in operating the Franchise, an assignment of assets to creditors and the expiration or termination of the Franchise’s lease. Franchisees typically have 30 days to cure these defaults.
This provision offers some security to franchisees, as Pearce Bespoke cannot terminate the agreement without a valid reason related to the franchisee's performance or compliance. However, franchisees should carefully review Section 15(A) and (B) of the Franchise Agreement, as referenced in Item 17, to fully understand what actions or omissions could lead to termination. Additionally, franchisees should be aware that these termination provisions are subject to state law, which may provide additional protections or requirements.