What collateral is used for the note payable with a bank for Pearce Bespoke?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
e Fees*
Estimated revenues to be recognized in future periods related to deferred franchise fees as reported at December 31, 2024, is as follows:
| Deferred Commissions | Non-refundable Franchise Fees | ||
|---|---|---|---|
| Year ending December 31: | |||
| 2025 | $ | 79,960 | $ 139,500 |
| 2026 | 79,960 | 90,000 | |
| 2027 | 79,960 | 90,000 | |
| 2028 | 79,960 | 90,000 | |
| 2029 | 79,960 | 90,000 | |
| Thereafter | 301,884 | 314,298 | |
| $ | 701,684 | $ 813,798 | |
| NOTE 3 – NOTES PAYABLE | |||
| Notes payable consist of the following at December 31, | 2024 | ||
| Note payable with a bank. Face amount of $150,000, payable in 54 | in July 2025. | $ 97,508 | |
| weekly installments of $3,528 including a fixed fee of 27% of the | |||
| face amount of the note. Final payment is due | |||
| Collateralized by the assets | |||
| of the Company. | |||
| Note payable with a bank. Face amount of $155,100, payable in | in | ||
| monthly minimum payments of $19,818 every two months or 25% | |||
| of accounts receivable presented for payment processing including | |||
| a fix fee of 13% of the principal amount. Final |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 39)
What This Means (2025 FDD)
According to Pearce Bespoke's 2025 Franchise Disclosure Document, the company has two notes payable with a bank. The first note, with a face amount of $150,000, is collateralized by the assets of the company. The second note, with a face amount of $155,100, is collateralized by accounts receivable.
For a prospective franchisee, this information is relevant because it provides insight into the financial obligations and security interests of Pearce Bespoke. Understanding what assets are pledged as collateral can help a franchisee assess the financial stability and risk profile of the franchisor. If Pearce Bespoke defaults on the first note, the bank has a claim on the company's assets.
Additionally, the second note's collateralization by accounts receivable indicates that the franchisor relies on franchisee payments. If Pearce Bespoke defaults on the second note, the bank has a claim on the accounts receivable. This could indirectly affect franchisees if it impacts the franchisor's ability to provide support or services.
It is important for potential franchisees to consult with a financial advisor to fully understand the implications of these notes payable and collateral arrangements. This information, combined with other financial disclosures in the FDD, can contribute to a comprehensive assessment of the franchisor's financial health.