Can Pearce Bespoke alter the Franchised Territory in a new franchise agreement with a transferee?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
The transferee-franchisee enters into a written agreement in a form satisfactory to Franchisor assuming and agreeing to discharge all of Franchisee's obligations and covenants under this Agreement for the remainder of its term or, at Franchisor's option, executes Franchisor's then-current standard form of franchise agreement which may not contain any further rights of renewal, but may contain royalty rates and advertising contributions (which may be different than those contained in this Agreement), and an altered Franchised Territory;
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to Pearce Bespoke's 2025 Franchise Disclosure Document, Pearce Bespoke has the option to alter the franchised territory in a new franchise agreement with a transferee. Specifically, if a franchisee transfers their Pearce Bespoke franchise to a new owner, Pearce Bespoke can require the transferee to execute the then-current standard form of franchise agreement.
This new agreement may not contain any further rights of renewal for the transferee. Additionally, the royalty rates and advertising contributions within the new agreement may differ from those in the original agreement. Most importantly, Pearce Bespoke has the right to include an altered franchised territory in the new agreement with the transferee.
For a prospective franchisee, this means that if they decide to sell their Pearce Bespoke franchise, the buyer might not have the same territory as the original franchisee. This could impact the value of the franchise and the potential for future growth. It is important for both the franchisee and the potential buyer to understand that the terms of the franchise, including the territory, can change upon transfer.