What are the consequences if a Pearce Bespoke franchisee fails to fully cooperate with the audit procedures?

According to Pearce Bespoke's 2025 Franchise Disclosure Document, a franchisee's failure to fully cooperate and timely complete the audit procedures constitutes a material breach of the Franchise Agreement. As a result of this breach, the franchisee is responsible for covering all of Pearce Bespoke's costs and expenses incurred due to the franchisee's lack of cooperation and timeliness.

This means that Pearce Bespoke has the right to demand that the franchisee pay for any expenses that Pearce Bespoke incurs while trying to perform the audit. These costs could include legal fees, accounting fees, travel expenses, and any other costs that Pearce Bespoke incurs as a result of the franchisee's failure to cooperate.

Furthermore, the FDD states that if audits reveal that the Royalty Fees have been deficient by more than two percent twice or more within any five year period, this will be considered a material breach of the agreement. This clause, combined with the one regarding failure to cooperate, highlights the importance of maintaining accurate financial records and being transparent with Pearce Bespoke during audits. Franchisees should ensure they understand their obligations regarding financial reporting and audits to avoid potential penalties or termination of their franchise agreement.