What is considered a 'transfer' of the Pearce Bespoke Development Agreement by the franchisee?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Development Agreement | Summary |
|---|---|---|
| Schedule by any Opening Deadline specified in the Development Schedule; any Franchise Agreement is terminated a result of default; or you breach or otherwise fail to comply fully with any other provision of the Development Agreement. Subject to state law. | ||
| i. Franchisee's obligations on termination/non-renewal | Section 6.2 | You will lose the right to continue to develop Franchised Businesses in your Development Area. |
| j. Assignment of contract by us | Section 7 | Fully assignable and transferrable by us. |
| k. "Transfer" by franchisee – | Section 7 | Includes transfer of the Development Agreement, any |
| definition | interest in the Development Agreement, or, if you are a business entity, any interest in the entity. | |
| l. Our approval of transfer by | Section 7 | We have the right to approve or not approve all transfers |
| franchisee | in our sole discretion. | |
| m. Conditions for our approval of | Section 7 | We have sole discretion in setting conditions for our |
| transfer | approval of a transfer. | |
| n. Our right of first refusal to acquire franchisee's business | Section 7 | We have the first right of refusal on all transfer, exercisable withing 30 days of receiving an executed copy of the contract of transfer. |
| o. Our option to purchase your | Not Applicable | Not Applicable |
| business | ||
| p. Death or disability of | Not Applicable | We have the right approve or disapprove any transfer in |
| franchisee | our sole discretion. |
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, a 'transfer' by the franchisee, regarding the Development Agreement, includes the transfer of the Development Agreement itself, any interest in the Development Agreement, or, if the franchisee is a business entity, any interest in that entity. Pearce Bespoke retains the right to approve or disapprove all transfers at its sole discretion and also has the first right of refusal on all transfers, which can be exercised within 30 days of receiving an executed copy of the contract of transfer.
This definition is important for prospective Pearce Bespoke developers because it clarifies that any change in ownership or control, whether of the agreement itself or of the business entity holding the agreement, constitutes a transfer. This broad definition ensures that Pearce Bespoke maintains control over who is developing their franchises and that no unauthorized parties can take over development rights.
The franchisor's right to approve or disapprove transfers and the right of first refusal gives Pearce Bespoke significant control over who becomes a developer. A prospective franchisee should carefully consider these provisions and understand that they cannot freely transfer their development rights without Pearce Bespoke's consent. This could impact the franchisee's exit strategy or ability to bring in partners or investors.
It is typical in franchising for the franchisor to have approval rights over transfers to maintain brand consistency and ensure that new franchisees or developers meet their standards. The 30-day right of first refusal is also a common provision, allowing the franchisor to purchase the business or development rights themselves if they do not approve of the proposed transferee.