What constitutes the license granted by Pearce Bespoke to its franchisees?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
When a franchisee purchases a franchise, the Company grants the franchisee the right to use the proprietary methods, techniques, trade dress, trademarks, and logos ("the license") for a specific period of time and in a specific territory. The license is symbolic intellectual property. Revenues related to the license are continuing royalties of 10% of gross sales, subject to a minimum royalty as defined in the franchise agreement. Royalty revenues are compensation for the use of the license in the territory, over the term of the contract, and will be used in part to continue the development of the Company's brand, the franchise system and provide on-going support for the Company's franchisees. The royalties are billed weekly and are recognized as revenue when earned.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 39)
What This Means (2025 FDD)
According to Pearce Bespoke's 2025 Franchise Disclosure Document, when a franchisee purchases a franchise, Pearce Bespoke grants them the right to use its proprietary methods, techniques, trade dress, trademarks, and logos. This grant is referred to as "the license". This license is for a specific period and within a specific territory. The FDD specifies that the license is symbolic intellectual property.
Pearce Bespoke franchisees pay royalties, calculated as 10% of gross sales (subject to a minimum amount defined in the franchise agreement), in exchange for the use of this license within their territory over the contract term. These royalty revenues are used, in part, to continue developing the Pearce Bespoke brand and franchise system, as well as to provide ongoing support to franchisees.
The FDD indicates that Pearce Bespoke recognizes revenue related to the license as continuing royalties. These royalties are billed weekly and recognized as revenue when earned, reflecting the ongoing nature of the license agreement and the franchisee's continuous use of Pearce Bespoke's intellectual property.