What does Pearce Bespoke exclude when measuring revenue based on contracts with franchisees?

According to Pearce Bespoke's 2025 Franchise Disclosure Document, revenue is measured based on the consideration specified in contracts with franchisees. However, Pearce Bespoke excludes incentives and amounts collected on behalf of third parties when measuring revenue.

This means that when Pearce Bespoke calculates revenue for the purposes of determining royalties, brand fund contributions, or other fees, they do not include any incentives given to franchisees or any money the franchisee collects as an agent for another company. For example, if a franchisee runs a promotion that gives customers a discount (an incentive), that discount amount is not included in the revenue calculation. Similarly, if the franchisee collects sales tax to remit to the government (collected on behalf of a third party), that amount is also excluded from the revenue calculation.

This policy is fairly standard in franchising, as it ensures that franchisees are not paying royalties or fees on money that either doesn't actually go to them (third-party collections) or represents a reduction in their actual sales (incentives). Prospective Pearce Bespoke franchisees should understand this policy, as it directly impacts the amount of royalties and other fees they will owe to the franchisor.