What is the definition of 'Operating Assets' in the context of a Pearce Bespoke Mobile Franchise?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
If the equipment and/or vehicles ("Operating Assets") used in the operation of any Mobile Franchise in your Development Schedule are destroyed or damaged by any cause beyond your control such that they may no longer continue to be utilized for the operation of a particular Business, you must immediately give us notice of such destruction or damage ("Destruction Event"). You must diligently work to repair and replace the Operating Assets of your Mobile Franchise as soon as possible to resume operation of your Business. If a Mobile Franchise is closed due to a Destruction Event, the Mobile Franchise will continue to be deemed "in operation" for the purpose of this Agreement for up to 30 days after the Destruction Event occurs. If a Mobile Franchise (i) is closed in a manner other than those described in this Section 3.2 or as otherwise agreed by us in writing or (ii) fails to reopen within 30 days after a Destruction Event, then we may exercise our rights under Section 6.2 (Our Remedies). In the event the Operating Assets are completely destroyed or otherwise incapable of being repaired following a Destruction Event, we will not exercise the remedies set forth under Section 6.2 provided, that (a) within the 30 days after the Destruction Event you have made arrangements with us or our designated supplier to obtain new Operating Assets for use in your Business; and (b) you are open and operating your Mobile Franchise in the protected territory within ninety (90) days of the Destruction Event.
Source: Item 23 — RECEIPTS (FDD pages 39–172)
What This Means (2025 FDD)
According to the 2025 Pearce Bespoke Franchise Disclosure Document, Operating Assets are defined as the equipment and/or vehicles used in the operation of any Mobile Franchise.
This definition is important in the context of potential damage or destruction of these assets. If the Operating Assets are damaged due to causes beyond the franchisee's control, the franchisee must notify Pearce Bespoke immediately. The franchisee is then expected to diligently repair or replace the assets to resume business operations as soon as possible.
Pearce Bespoke considers a Mobile Franchise to be "in operation" for up to 30 days after a Destruction Event, which is the notification of damage or destruction. However, if the Mobile Franchise does not reopen within those 30 days or closes for other reasons not approved by Pearce Bespoke, the franchisor may exercise its rights under Section 6.2 of the agreement, which likely outlines remedies for such situations.
If the Operating Assets are completely destroyed and cannot be repaired, Pearce Bespoke will not pursue remedies under Section 6.2, provided that the franchisee arranges for new Operating Assets within 30 days of the Destruction Event and reopens the Mobile Franchise within 90 days of the Destruction Event. This clause provides a grace period and outlines specific actions a franchisee must take to remain in good standing after a significant event impacting their ability to operate.