Is Pearce Bespoke an approved supplier for certain items franchisees are contractually obligated to purchase?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
subject to our training and reporting requirements.
Pearce Bespoke is an Approved Supplier for certain items for which you are contractually obligated to purchase in the operation of your Franchise. Pearce Bespoke, its officers and/or persons affiliated with us, may now or in the future own an interest in Pearce Bespoke and be Approved Suppliers of certain items of the Business System. Pearce Bespoke officers do not own any interest in any Approved Supplier. Approved Supplier items include, but shall not limited to, recruiting services, computer hardware, software, collaboration and communication services, telephone, information management system, credit/debit card processing, criminal history background checks, email marketing, online accounting, virtual phone systems and client online surveys. You must license the POS/CRM software and purchase the computer hardware components for the POS System (the "POS System") either from us or a third-party vendor which may be modified from time to time in the Manuals. In the last fiscal year ending on December 31, 2023, we had total revenues of $572,535 of which $234,000, or 40.1%, was derived in revenue from required franchisee purchases or leases. Our affiliates have not received any other rebates, discounts or other material consideration from any other suppliers based on your r
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 19–20)
What This Means (2025 FDD)
According to Pearce Bespoke's 2025 Franchise Disclosure Document, Pearce Bespoke is indeed an approved supplier for specific items that franchisees are contractually obligated to purchase. These items include recruiting services, computer hardware, software, collaboration and communication services, telephone systems, information management systems, credit/debit card processing, criminal history background checks, email marketing services, online accounting software, virtual phone systems, and client online surveys. Franchisees must also license POS/CRM software and purchase computer hardware components for the POS System either from Pearce Bespoke or a third-party vendor. In the fiscal year ending December 31, 2023, Pearce Bespoke's total revenues were $572,535, with $234,000 (40.1%) derived from required franchisee purchases or leases.
This arrangement means that Pearce Bespoke franchisees are required to purchase certain essential goods and services directly from the franchisor or approved vendors. This ensures uniformity and quality control within the Pearce Bespoke Business System. However, it also means that franchisees may not have the freedom to shop around for the best prices on these items. The FDD indicates that required purchases from approved suppliers and purchases meeting Pearce Bespoke's specifications will constitute approximately 65% - 80% of the franchisee's total purchases for establishing the franchise and continuing operations.
Pearce Bespoke retains the discretion to make final determinations on all approved suppliers, but will consider supplier approval requests from franchisees. This provides an avenue for franchisees to potentially suggest alternative suppliers, although Pearce Bespoke has the ultimate authority in these decisions. Pearce Bespoke may also receive compensation from approved suppliers based on the suppliers' dealings with the franchisor, franchisees, or the broader Business System. This compensation can take various forms, such as cash, credit, rebates, or commissions, and Pearce Bespoke can use these funds for any purpose they deem appropriate.