What collateral is used for the second note payable with a bank for Pearce Bespoke?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
| 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 second note payable with a bank, which has a face amount of $155,100, is collateralized by accounts receivable. The loan requires monthly minimum payments of $19,818 every two months, or 25% of accounts receivable presented for payment processing, including a fixed fee of 13% of the principal amount. The final payment is due in March 2026. As of December 31, 2024, the balance of this note payable was $68,874.
For a prospective Pearce Bespoke franchisee, this information is relevant because it shows how the franchisor, Pearce Bespoke Franchising, LLC, manages its debt and finances. Understanding the collateral used for loans can provide insight into the company's financial stability and risk management practices. Accounts receivable being used as collateral suggests that the lender has a claim on the payments due to Pearce Bespoke from its franchisees or customers.
It is important for potential franchisees to review the complete financial statements and notes to fully understand the financial health of Pearce Bespoke. This includes assessing the company's ability to meet its debt obligations and how these obligations might impact the support and services provided to franchisees. Consulting with a financial advisor is recommended to interpret these financial statements in the context of the franchise opportunity.