Can the franchised territory be altered if the transferee-franchisee executes the then-current standard form of franchise agreement for Pearce Bespoke?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
The transferee-franchisee enters into a written agreement in a form satisfactory to Franchisor assuming and agreeing to discharge all of Franchisee's obligations and covenants under this Agreement for the remainder of its term or, at Franchisor's option, executes Franchisor's then-current standard form of franchise agreement which may not contain any further rights of renewal, but may contain royalty rates and advertising contributions (which may be different than those contained in this Agreement), and an altered Franchised Territory;
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to Pearce Bespoke's 2025 Franchise Disclosure Document, the franchisor has the option to alter the franchised territory if the transferee-franchisee executes the then-current standard form of franchise agreement. Specifically, the FDD states that when a franchisee transfers their business to a new franchisee, Pearce Bespoke can require the new franchisee to sign the current franchise agreement.
This new agreement may include different terms than the original agreement, including modifications to the franchised territory. Additionally, the new agreement may have different royalty rates and advertising contributions.
For a prospective franchisee, this means that if they decide to sell their Pearce Bespoke franchise, the territory granted to the buyer could be different from their own. This could impact the value of the franchise and the potential pool of buyers. It is important to note that the franchisor has the option to require the new agreement, but it is not mandatory.
It is also important to note that the new agreement may not contain any further rights of renewal. This could be a significant disadvantage for the transferee-franchisee, as they would not have the option to extend the term of the franchise beyond the initial term.