What is the definition of 'Non-Exclusive Customers' for a Pearce Bespoke franchise?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
You may not advertise, market, solicit, sell, or service customers outside your Franchised Territory ("Non-Exclusive Customers"), unless you are solicited or have a prior verifiable relationship with the Non-Exclusive Customer. Even if you sell to a Non-Exclusive Customer, you must pay us or the incumbent franchise owner an encroachment fee of twenty percent (20%) of the Gross Sales attributed to the Non-Exclusive Customers sales outside of your Franchised Territory ("Encroachment Fee").
Source: Item 12 — TERRITORY (FDD pages 27–29)
What This Means (2025 FDD)
According to Pearce Bespoke's 2025 Franchise Disclosure Document, a "Non-Exclusive Customer" is defined as a customer outside of a franchisee's designated territory. Pearce Bespoke franchisees are generally restricted from actively targeting customers outside their assigned territory through advertising, marketing, or direct solicitation.
However, the FDD outlines exceptions where a Pearce Bespoke franchisee can sell to Non-Exclusive Customers. These exceptions include instances where the customer solicits the franchisee's services or the franchisee has a pre-existing, verifiable relationship with the customer. This suggests that while franchisees are expected to primarily focus on their local territory, they are not entirely prohibited from serving customers outside of it under certain circumstances.
If a Pearce Bespoke franchisee does make a sale to a Non-Exclusive Customer, the franchisee is obligated to pay an encroachment fee. This fee is set at twenty percent (20%) of the gross sales attributed to that Non-Exclusive Customer. This encroachment fee is paid either to Pearce Bespoke or to the franchisee whose territory the customer resides in. This policy is designed to protect the territorial interests of existing franchisees and compensate them for sales made outside of their designated area.