What is the alternative calculation for the Pearce Bespoke Transfer Fee, based on the then-current franchise fee?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
| 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)
What This Means (2025 FDD)
According to Pearce Bespoke's 2025 Franchise Disclosure Document, the transfer fee is calculated as the greater of two options. The first option is a flat fee of $10,000. The second option is 25% of the then-current franchise fee. This fee is payable before the completion of the transfer, and is subject to state law. However, Pearce Bespoke will not charge a transfer fee for transfers to immediate family members.
For a prospective Pearce Bespoke franchisee, this means that when selling their franchise, they will need to pay a transfer fee to Pearce Bespoke. The amount will depend on which calculation results in a higher fee: either a fixed $10,000 or 25% of the franchise fee at the time of the transfer. It is important to note the exception for transfers to immediate family, which are exempt from this fee.
Franchise transfer fees are a common practice in the franchise industry. They are intended to compensate the franchisor for the work involved in approving a new franchisee and updating the franchise agreement. The fees can vary widely depending on the brand and the specific terms of the franchise agreement. It is important for prospective franchisees to understand the transfer fee structure before investing in a franchise.