Does the Pearce Bespoke franchise agreement grant the franchisee the exclusive right to establish and operate a specified number of Businesses within a specified geographical area?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
chise agreements (a "Franchise Agreement").
- NOW, THEREFORE, for and in consideration of the foregoing premises and the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:
1. Grant of Development Rights and Development Area
Subject to the terms and conditions of this Agreement, we grant to you the right, and you undertake the obligation, to establish and operate in the area designated in Exhibit A to this Agreement (the "Development Area") the number of Businesses specified in the development schedule in Exhibit A (the "Development Schedule"). This Agreement does not grant you any right to use the Marks (as defined in your Initial Franchise Agreement) or the System (as defined in your Initial Franchise Agreement). Rights to use the Marks and the System are granted only by the Franchise Agreements.
2. Fees
Upon execution of this Agreement, you must pay us a development fee in the amount specified in Exhibit A (the "Development Fee"), which is based on the initial franchise fee you must pay for each Mobile Franchise that you develop (the "Franchise Fee", which is also specified in Exhibit A). The Development Fee will be credited towards 100% of the Franchise Fee due under the Franchise Agreement for each Mobile Franchise that you develop pursuant to this Agreement, including the Initial Franchise Agreement. The Development Fee is fully earned by us when we and you sign this Agreement and is non-refundable, even if you do not comply with the Development Schedule.
3. Development Schedule and Deadlines
- 3.1 Development Schedule. You must enter into Franchise Agreements, and open and operate Businesses in accordance with the deadlines set forth in the Development Schedule. By each "Opening Deadline" specified in the Development Schedule, you must have the specified number of Businesses open and operating. Prior to opening additional Businesses in your Development Area, you must: (i) possess sufficient financial and organizational capacity to develop, open, operate, and manage each additional Mobile Franchise in our reasonable judgment; (ii) be in full compliance with all brand requirements at any existing Businesses you operate; and (iii) be in compliance with any Franchise Agreement or any other agreement entered into with us.
- 3.2 Damaged Operating Assets.
Source: Item 23 — RECEIPTS (FDD pages 39–172)
What This Means (2025 FDD)
According to the 2025 Pearce Bespoke Franchise Disclosure Document, the Area Development Agreement grants the franchisee the right and obligation to establish and operate a specified number of businesses within a defined Development Area, as detailed in Exhibit A. This agreement does not grant any rights to use the Pearce Bespoke marks or system; these rights are granted only by the Franchise Agreements for each individual Mobile Franchise.
The exclusivity within the Development Area is conditional. Pearce Bespoke will not operate or license others to operate a Mobile Franchise under its marks and system within the Development Area, as long as the franchisee adheres to the Development Schedule and maintains the minimum required number of open and operating businesses. Each Mobile Franchise opened will have a protected territory as defined in its individual Franchise Agreement.
However, the Area Development Agreement does not grant the right to operate in all parts of the Development Area until a new Franchise Agreement is signed that includes a specific portion of the Development Area as the franchisee's protected territory. Furthermore, Pearce Bespoke retains the right to conduct business activities under any name, in any geographic area, without restriction, except as expressly provided in the agreement. This includes establishing franchises or company-owned outlets offering similar products or services under different names outside the Development Area, or through alternative distribution channels, even within the Development Area.