Can Pearce Bespoke cause the Brand Fund to invest any surplus?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
In implementing the Brand Fund, Franchisor has the right to spend in any fiscal year an amount greater or less than the aggregate contributions to the Fund in that year, and the Brand Fund may borrow from Franchisor or other lenders to cover Fund deficits. Franchisor can accumulate funds over time until such time as Franchisor determines in its sole discretion that sufficient funds are available to adequately conduct Fund activities as contemplated herein. Franchisor can cause the Fund to invest any surplus.
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to the 2025 Pearce Bespoke FDD, Pearce Bespoke has the authority to direct the Brand Fund to invest any surplus funds it may accumulate. This means that if the Brand Fund has more money than it needs for current advertising and marketing activities, Pearce Bespoke can instruct the fund to invest the excess.
This provision allows Pearce Bespoke to potentially grow the Brand Fund through investments, which could lead to more resources for advertising and marketing initiatives in the future. However, it also introduces the risk of investment losses, although the FDD does not specify the types of investments that the Brand Fund can make.
As a prospective franchisee, it would be prudent to inquire with Pearce Bespoke about their investment strategy for the Brand Fund, including the types of investments they typically make, the level of risk involved, and the historical performance of the fund's investments. Understanding these aspects can help a franchisee assess the potential benefits and risks associated with the Brand Fund's investment activities.