Can Pearce Bespoke assign or transfer the Development Agreement?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
fail to have open and operating, the minimum number of Businesses specified in the Development | | Provision | Section in Development Agreement | Summary | |-------------------------------------------------------------------------------------------|----------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | | | Schedule by any Opening Deadline specified in the Development Schedule; any Franchise Agreement is terminated a result of default; or you breach or otherwise fail to comply fully with any other provision of the Development Agreement. Subject to state law. | | i. Franchisee's obligations on termination/non-renewal | Section 6.2 | You will lose the right to continue to develop Franchised Businesses in your Development Area. | | j. Assignment of contract by us | Section 7 | Fully assignable and transferrable by us. | | k. "Transfer" by franchisee – | Section 7 | Includes transfer of the Development Agreement, any | | definition | | interest in the Development Agreement, or, if you are a business entity, any interest in the entity. | | l. Our approval of transfer by | Section 7 | We have the right to approve or not approve all transfers | | franchisee | | in our sole discretion. | | m.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP (FDD pages 31–34)
What This Means (2025 FDD)
According to Pearce Bespoke's 2025 Franchise Disclosure Document, Pearce Bespoke has the right to assign or transfer the Development Agreement. Specifically, Section 7 of the Development Agreement states that it is 'Fully assignable and transferrable by us.' This means that Pearce Bespoke, as the franchisor, can transfer its rights and obligations under the Development Agreement to another party without needing the franchisee's consent.
However, if a franchisee wishes to transfer their interest in the Development Agreement, it is considered a 'transfer' as defined in Section 7. This includes transferring the agreement itself or any interest in it, or if the franchisee is a business entity, any interest in that entity. Pearce Bespoke retains the right to approve or disapprove any transfer by the franchisee in its sole discretion, and can set conditions for approval of a transfer. Pearce Bespoke also has a right of first refusal to acquire the franchisee's business, which can be exercised within 30 days of receiving an executed copy of the transfer contract.
These provisions regarding transfer are important for prospective franchisees to understand. While Pearce Bespoke has unrestricted ability to assign the Development Agreement, the franchisee's ability to transfer is subject to Pearce Bespoke's approval, conditions, and right of first refusal. This could impact the franchisee's exit strategy or ability to sell the business. Franchisees should carefully consider these terms and seek legal counsel to fully understand their rights and obligations regarding transfer of the Development Agreement.