Does the Pearce Bespoke agreement create a partnership between Franchisor and Franchisee?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
ct to such indemnification. The indemnities and assumptions of liabilities and obligations stated in this Agreement will continue in full force and effect following the expiration, termination, or a transfer of this Agreement.
Nothing in this Agreement may be construed to create a partnership, joint venture, agency, employment, or fiduciary relationship of any kind. None of Franchisee's employees will be considered to be Franchisor's employees. Neither Franchisee nor any of Franchisee's employees whose compensation is paid by Franchisee may in any way, directly or indirectly, expressly or by implication, be construed to be an employee of Franchisor for any purpose, most particularly with respect to any mandated or other insurance coverage, tax or contributions, or requirements pertaining to withholdings, levied, or fixed by any city, state, or federal governmental agency. Franchisor will not have the power to hire or fire Franchisee's employees and has no authority to control, either directly or indirectly, the essential terms and conditions of employment of Franchisee's employees. Franchisee acknowledges and agrees that Franchisee, in Franchisee's sole and absolute discretion, shall determine all such essential terms and conditions of employment, which are defined in the Operations Manual or otherwise defined by law. Franchisee will alone exercise day-to-day control over all operations, activities, and elements of the Pearce Bespoke Franchise. Franchisee is solely responsible for the safety and well-being of Franchisee's employees and the customers of the Pearce Bespoke Franchise. All matters of safety and security are within Franchisee's discretion and control, and Franchisee's indemnification obligations set forth in Section 11 hereof shall apply to any claims made against Franchisor regarding safety or security. Franchisee acknowledges and agrees that the various requirements, prohibitions, specifications, and procedures of the Business System which Franchisee is required to comply with under this Agreement, whether set forth in the Operations Manual or otherwise, do not directly or indirectly constitute, suggest, infer, or imply that Franchisor controls any aspect or element of the day-to-day operations of the Pearce Bespoke Franchise, which Franchisee alone controls, but only constitute standards Franchisee must adhere to when exercising control of the day-to-day operations of the
Pearce Bespoke Franchise. Franchisee may not, without Franchisor's written approval, have any power to obligate Franchisor for any expense, liabilities, or other obligations, other than specifically provided in this Agreement.
12. SALES REPORTS, FINANCIAL STATEMENTS AND AUDIT RIGHTS
A. Sales Reports.
Franchisee will maintain an accurate written record of daily Gross Sales and will deliver to Franchisor a signed and verified statement of the weekly Gross Sales of Franchisee's business using such forms and methods as Franchisor may require in writing. The weekly statement of Gross Sales must be provided to Franchisor on or before Wednesday of each week for the preceding week. Franchisor reserves the right to modify or substitute the required forms and methods and impose additional recordkeeping procedures.
B. Financial Statements.
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to Pearce Bespoke's 2025 Franchise Disclosure Document, the Franchise Agreement explicitly states that the agreement is not to be construed as creating a partnership, joint venture, agency, employment, or fiduciary relationship. This means that the franchisee and Pearce Bespoke are independent entities, and neither has the authority to act on behalf of the other, except as specifically outlined in the Franchise Agreement. This independence extends to the franchisee's employees, who are not considered employees of Pearce Bespoke. Pearce Bespoke does not have the power to hire or fire the franchisee's employees, nor does it control the essential terms and conditions of their employment.
The franchisee has sole discretion over the day-to-day operations of their Pearce Bespoke franchise and is responsible for the safety and well-being of their employees and customers. The franchisee must adhere to the standards of the Business System, but this adherence does not imply that Pearce Bespoke controls the day-to-day operations of the franchise. The franchisee cannot obligate Pearce Bespoke for any expenses, liabilities, or other obligations without written approval, except as specifically provided in the Franchise Agreement.
This independent contractor relationship is further reinforced by the statement that neither Pearce Bespoke nor the franchisee can make agreements, representations, or warranties in the name of the other, or represent their relationship as anything other than franchisor and franchisee. The franchisee is responsible for losses or damages arising from the operation of their business and must indemnify Pearce Bespoke against any claims related to their business operations. This structure is typical in franchising, where the franchisee operates their business independently while adhering to the franchisor's system and standards.