Is an assignment of assets to creditors considered a curable default for a Pearce Bespoke franchise?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise | Summary | |
|---|---|---|---|
| Agreement | |||
| a. | Length of the franchise | Section 2(A) | 10 years |
| b. | Renewal or extension of the term | Section 2(B) | If you meet the renewal requirements set forth in the Franchise Agreement, you can renew the Franchise Agreement for up to two additional 5-year period(s). |
| c. | Requirements for you to renew or extend | Section 2(B) | Provide advance notice in writing, sign then current Franchise Agreement, pay renewal fee, remodel, meet all current Brand Standards, secure extension of lease and be in compliance with current Franchise Agreement during the term of the Agreement. You may be asked to sign a Franchise Agreement with materially different terms and conditions than your original Franchise Agreement. The entire provision is subject to state law. |
| d. | Termination by you | Section 16(A) | If you are complying with the Franchise Agreement, and Pearce Bespoke fails to cure a material default within 30 days after Pearce Bespoke’s receipt of written notice, subject to state law. |
| e. | Termination by Pearce Bespoke without cause | Not Applicable | Not Applicable |
| f. | Termination by Pearce Bespoke with cause | Sections 15(A) and (B) | Pearce Bespoke can terminate the Franchise Agreement only if you default. Subject to state law. |
| g. | “Cause” defined – curable defaults | Sections 15(A) and (B) | You have 30 days to cure a violation of any material provision of the Franchise Agreement, non-payment of amounts owed to Pearce Bespoke or any applicable local advertising cooperative, failure to abide by Pearce Bespoke’s standards and requirements in operating the Franchise, an assignment of assets to creditors and the expiration or termination of the Franchise’s lease. Subject to state law. |
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, an assignment of assets to creditors is considered a curable default. Specifically, if a franchisee assigns assets to creditors, Pearce Bespoke can terminate the Franchise Agreement, but the franchisee has an opportunity to cure the default.
The FDD states that a franchisee has 30 days to cure several defaults, including an assignment of assets to creditors. This means that if a Pearce Bespoke franchisee assigns assets to creditors, they have 30 days to resolve the issue and prevent termination of the franchise agreement. This cure period provides an opportunity for the franchisee to address the default and continue operating the franchise.
It is important to note that the ability to cure a default is subject to state law, meaning that the specific regulations and requirements may vary depending on the state in which the franchise operates. Prospective franchisees should carefully review the franchise agreement and any applicable state laws to fully understand their rights and obligations in the event of a default. Additionally, the FDD mentions that Pearce Bespoke can terminate the Franchise Agreement only if the franchisee defaults, further emphasizing the importance of understanding what constitutes a default and the available cure periods.