Will a Pearce Bespoke franchisee receive compensation for sales made by Pearce Bespoke through alternative distribution channels in the Franchised Territory?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
Pearce Bespoke reserves the right to sell at all conventions, conferences, and other trade centers both domestically in the United States and internationally to market and sell its services solely or jointly with any of its franchisees. We reserve the rights to offer (i) other services and products not offered under the Marks, (ii) other quality custom clothing and accessories concepts or products under the Marks or other trademarks, and (iii) products or services through other channels of distribution in the Franchised Territory including, but not limited to, co-branding with other quality custom clothing and accessories businesses, and products offered through retail stores, the Internet or direct marketing. You will receive no compensation for our sales through alternative distribution channels in the Franchised Territory.
Pearce Bespoke may from time to time enter into agreements to provide services to customers as part of a national, regional, or key account program ("Key Accounts") at locations within the Franchised Territory. You must accept and perform the terms of such agreements (including, without limitation, special pricing, payment terms, timing of services, and central invoicing) with respect of locations within the Franchised Territory. If you refuse to perform the required services or we determine that your Franchise is not qualified, interested, able, or available to perform the services, you are required to allow either our employee(s) or another franchisee to enter the Franchised Territory to perform the required services. In the case of an agreement under which the customer will pay a fixed amount for services at all locations listed in the agreement, we may allocate the fixed amount among the businesses performing the services.
Source: Item 12 — TERRITORY (FDD pages 27–29)
What This Means (2025 FDD)
According to Pearce Bespoke's 2025 Franchise Disclosure Document, a franchisee will not receive compensation for sales that Pearce Bespoke makes through alternative distribution channels within the franchisee's territory. Pearce Bespoke retains the right to sell its services at conventions, conferences, and trade centers, both domestically and internationally, either independently or in collaboration with its franchisees. They also reserve the right to offer other services and products, including those not offered under the Pearce Bespoke marks, and to distribute products through various channels such as co-branding, retail stores, the Internet, or direct marketing, all without compensating the franchisee. This policy is further reinforced by the statement that if Pearce Bespoke or its affiliates solicit or accept orders within a franchisee's territory, they are not obligated to provide any compensation to the franchisee.
This lack of compensation for sales through alternative channels could significantly impact a franchisee's potential revenue. While the franchisee is responsible for operating their location and meeting minimum performance standards, Pearce Bespoke can independently pursue sales within the same territory without sharing the revenue. This arrangement could create tension if the franchisee feels that Pearce Bespoke's direct sales efforts are undermining their business.
Furthermore, Pearce Bespoke reserves the right to distribute products through alternative channels of distribution, including the internet, inside or outside of the Franchised Territory. This includes the right to establish franchised or company-owned businesses selling similar products or services under a trademark different from the Marks inside or outside of the Franchised Territory. While the FDD states that Pearce Bespoke does not currently operate or franchise businesses under a different trademark that will sell goods or services that are the same or similar to those that you will sell, they reserve the right to do so.
Prospective franchisees should carefully consider the implications of these policies and discuss with Pearce Bespoke how these alternative distribution channels are managed and how they might affect the franchisee's business. Understanding the potential for competition from Pearce Bespoke's direct sales efforts and other channels is crucial for assessing the overall viability and profitability of a Pearce Bespoke franchise.