What constitutes 'repeatedly' failing to comply with material requirements of the Franchise Agreement for a Pearce Bespoke franchise?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor may terminate this Agreement immediately upon delivery of written notice to Franchisee, with no opportunity to cure, if the termination results from any of the following: (1) Franchisee repeatedly fails to comply with one or more material requirements of this Agreement; (2) the nature of Franchisee's breach makes it not curable; (3) Franchisee willfully and repeatedly deceives customers relative to the source, nature or quality of goods sold; (4) any default under items (1), (3), (6), (8), (9), (11), (12), (13) or (14) in Section 15(A) above; or (5) Franchisee willfully and materially falsifies any report, statement, or other written data furnished to Franchisor either during the franchise application process or after Franchisee is awarded a franchise. For purposes of Section 15(B)(1) of the Franchise Agreement, the word "repeatedly" means Franchisee's failure, on two or more separate occurrences during any twenty-four (24) month period, to comply with one or more material requirements of the Franchise Agreement, even if the default is subsequently cured within the applicable time period. Any report submitted pursuant to Section 12 will be conclusively deemed to be materially false if it understates Gross Sales by more than four percent (4%).
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to the 2025 Pearce Bespoke Franchise Disclosure Document, 'repeatedly' failing to comply with material requirements is specifically defined. For Pearce Bespoke, it means the franchisee fails, on two or more separate occasions within a 24-month period, to meet one or more material requirements outlined in the Franchise Agreement. This definition applies even if the franchisee corrects the issue within the given timeframe.
This is a crucial point for prospective Pearce Bespoke franchisees. Even if a franchisee fixes a violation, multiple instances of non-compliance within the specified timeframe can lead to termination. This highlights the importance of understanding and adhering to all material requirements of the Franchise Agreement from the outset.
Furthermore, the FDD specifies that any report submitted pursuant to Section 12 will be conclusively deemed to be materially false if it understates Gross Sales by more than four percent (4%). This provides a concrete example of a material requirement and clarifies what constitutes a breach of that requirement. Pearce Bespoke franchisees should ensure accurate reporting to avoid potential issues.
In summary, the Pearce Bespoke franchise agreement clearly defines 'repeatedly' in the context of failing to comply with material requirements. Franchisees must be vigilant in maintaining compliance to avoid potential termination, even if issues are promptly addressed. Understanding this definition is essential for any prospective franchisee.