What was the ending members' equity (deficiency) for Pearce Bespoke at the end of 2023?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
abilities and Members' Equity (Deficiency) | $ | 929,411 | $ | 71,811 |
PEARCE BESPOKE FRANCHISING, LLC STATEMENTS OF OPERATIONS AND MEMBERS' EQUITY (DEFICIENCY)
| Years Ended December 31, | |||
|---|---|---|---|
| 2023 | 2022 | ||
| Revenues: Initial franchise fees Equipment fees | $ 164,210 168,000 | $ | - - |
| Franchise revenues | 153,238 | 36,593 | |
| Royalties | 47,008 | 6,031 | |
| Rebates | 40,079 | 426 | |
| Total Revenues | 572,535 | 43,050 | |
| Operating Expenses | 1,052,399 | 89,414 | |
| Net Income (Loss) | (4 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 39)
What This Means (2025 FDD)
According to Pearce Bespoke's 2025 Franchise Disclosure Document, the members' equity (deficiency) at the end of 2023 was a negative $471,984. In contrast, at the end of 2022, the members' equity was $7,880. This represents a significant decrease in equity over the course of one year.
This deficiency indicates that Pearce Bespoke's liabilities exceeded its assets at the end of 2023. For a prospective franchisee, this could signal financial instability within the company. It is important to note that this figure reflects the financial position of the franchisor, Pearce Bespoke Franchising, LLC, and not necessarily the performance of individual franchise locations.
It is common for new franchisors to operate at a loss in their early years as they invest in building their brand and infrastructure. However, a substantial deficiency in members' equity, such as the one reported by Pearce Bespoke, warrants careful consideration. A potential franchisee should investigate the reasons for this deficiency and the franchisor's plans to address it. Understanding the franchisor's financial health is crucial for assessing the long-term viability and support that franchisees can expect.
Prospective franchisees should seek clarification from Pearce Bespoke regarding their financial statements. Understanding the factors contributing to the members' equity deficiency and the franchisor's strategy for improving their financial position is essential for making an informed investment decision.