How does Pearce Bespoke handle income taxes as a disregarded entity?

According to the 2025 Pearce Bespoke Franchise Disclosure Document, Pearce Bespoke Franchising, LLC considers itself a pass-through entity for income tax purposes. This means that Pearce Bespoke itself does not pay income taxes at the corporate level. Instead, any profits or losses are passed through to the members or owners of the LLC, who then report these on their individual income tax returns. As a result, the company does not record any liability for uncertain tax positions, and the financial statements do not include a provision for income tax.

For a prospective Pearce Bespoke franchisee, this information is primarily relevant in understanding the financial structure of the franchisor. It confirms that Pearce Bespoke's financial statements are presented without any provision for income taxes, as the tax liability rests with its members. This is a common arrangement for LLCs and S corporations, where the business income is taxed at the owner's level to avoid double taxation.

Pearce Bespoke's management continually evaluates factors such as expiring statutes of limitations, audits, proposed settlements, changes in tax law, and new authoritative rulings to ensure accurate tax reporting. This ongoing evaluation helps Pearce Bespoke remain compliant with tax regulations and ensures that its members receive the appropriate pass-through income or loss information for their tax filings. Franchisees should consult with their own tax advisors to understand the full implications of Pearce Bespoke's tax structure.