Is Pearce Bespoke's approval required for the third-party transferee of a franchisee's rights?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
the date signed below, by the individual or entity listed below as franchisee ("Franchisee"), and each individual holding an ownership interest in Franchisee (collectively with Franchisee, "Releasor") in favor of Pearce Bespoke Franchising, LLC ("Franchisor," and together with Releasor, the "Parties"). This General Release of Claims will not apply to claims arising under the Franchise Investment Protection Act, Chapter 19.100 RCW, or the rules adopted thereunder.
WHEREAS, Franchisor and Franchisee have entered into a Franchise Agreement ("Agreement") pursuant to which Franchisee was granted the right to own and operate a Pearce Bespoke business;
WHEREAS, [Franchisee has notified Franchisor of its des
Source: Item 23 — RECEIPTS (FDD pages 39–172)
What This Means (2025 FDD)
According to the 2025 Pearce Bespoke FDD, Pearce Bespoke Franchising, LLC's consent is required for a franchisee to transfer their agreement and rights to a third party. Specifically, the FDD states that a franchisee must notify Pearce Bespoke of their desire to transfer the agreement and all related rights or ownership interest to a transferee. As a condition of Pearce Bespoke's consent, the releasor, which includes the franchisee, must execute a General Release of Claims.
This requirement means that if a franchisee wants to sell their Pearce Bespoke franchise to someone else, they cannot do so without the franchisor's permission. Pearce Bespoke uses the General Release of Claims to ensure that upon transfer, the franchisee and related parties release Pearce Bespoke from any potential liabilities or claims related to the franchise agreement. This is a fairly standard practice in franchising, as it protects the franchisor from future disputes arising from the previous franchisee's operation of the business.
The General Release of Claims includes the franchisee, individuals holding ownership interest in the franchisee, and their subsidiaries, affiliates, parents, divisions, successors, and assigns. By signing this release, these parties discharge Pearce Bespoke and its affiliates from any claims, known or unknown, related to the franchise agreement. However, the release does not apply to claims arising under the Franchise Investment Protection Act, Chapter 19.100 RCW.
For a prospective franchisee, this underscores the importance of understanding the terms of the franchise agreement and the conditions under which they can exit the business. It also highlights the need to maintain a good relationship with Pearce Bespoke, as their consent is crucial for any transfer of ownership. Before signing any agreements, a potential franchisee should consult with a legal professional to fully understand the implications of the General Release of Claims and the transfer process.