When will Pearce Bespoke defer collection of the Franchise Fee under the development agreement?

According to the 2025 Pearce Bespoke Franchise Disclosure Document, in the state of Minnesota, Pearce Bespoke will defer the payment of the initial franchise fee, development fee, and any other initial payment until all of their material pre-opening obligations have been satisfied and the business is open and operating. However, the franchisee must execute the Franchise Agreement prior to looking for a site or beginning training.

This deferral of fees is specific to franchisees operating in Minnesota and aims to alleviate some of the initial financial burden on new franchisees. By delaying the collection of these fees until the business is ready to open, Pearce Bespoke is aligning its interests with the franchisee's success, as the franchisor only gets paid once the franchisee is operational.

It's important to note that while the payment of fees is deferred, the franchisee is still required to sign the Franchise Agreement before starting site selection or training. This means the franchisee is legally bound by the terms of the agreement even before any money changes hands. Prospective franchisees in Minnesota should carefully review the Franchise Agreement and understand their obligations before signing.

This type of arrangement is not standard across all franchise systems, as many franchisors require upfront payment of fees to cover their initial costs of onboarding and training a new franchisee. The deferral policy in Minnesota may make Pearce Bespoke more attractive to potential franchisees in that state, as it reduces the initial financial risk.