What happens if a Pearce Bespoke franchisee makes an assignment of assets to creditors?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise | Summary | |
|---|---|---|---|
| Agreement | |||
| a. | Length of the franchise | Section 2(A) | 10 years |
| b. | Renewal or extension of the term | Section 2(B) | If you meet the renewal requirements set forth in the Franchise Agreement, you can renew the Franchise Agreement for up to two additional 5-year period(s). |
| c. | Requirements for you to renew or extend | Section 2(B) | Provide advance notice in writing, sign then current Franchise Agreement, pay renewal fee, remodel, meet all current Brand Standards, secure extension of lease and be in compliance with current Franchise Agreement during the term of the Agreement. You may be asked to sign a Franchise Agreement with materially different terms and conditions than your original Franchise Agreement. The entire provision is subject to state law. |
| d. | Termination by you | Section 16(A) | If you are complying with the Franchise Agreement, and Pearce Bespoke fails to cure a material default within 30 days after Pearce Bespoke’s receipt of written notice, subject to state law. |
| e. | Termination by Pearce Bespoke without cause | Not Applicable | Not Applicable |
| f. | Termination by Pearce Bespoke with cause | Sections 15(A) and (B) | Pearce Bespoke can terminate the Franchise Agreement only if you default. Subject to state law. |
| g. | “Cause” defined – curable defaults | Sections 15(A) and (B) | You have 30 days to cure a violation of any material provision of the Franchise Agreement, non-payment of amounts owed to Pearce Bespoke or any applicable local advertising cooperative, failure to abide by Pearce Bespoke’s standards and requirements in operating the Franchise, an assignment of assets to creditors and the expiration or termination of the Franchise’s lease. Subject to state law. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP (FDD pages 31–34)
What This Means (2025 FDD)
According to Pearce Bespoke's 2025 Franchise Disclosure Document, if a franchisee makes an assignment of assets to creditors, it constitutes a cause for Pearce Bespoke to terminate the Franchise Agreement. The franchisee typically has 30 days to cure a violation of any material provision of the Franchise Agreement. However, the document does not specify if a franchisee has the opportunity to cure an assignment of assets to creditors. All terminations are subject to state law, which may provide additional rights or restrictions.
This provision means that if a Pearce Bespoke franchisee faces financial difficulties and assigns their assets to creditors to manage or resolve those debts, Pearce Bespoke has the right to terminate the franchise agreement. This could result in the franchisee losing their business and the associated income stream. It is a significant risk for franchisees who may encounter financial challenges during the term of their agreement.
It is important for prospective Pearce Bespoke franchisees to understand the circumstances under which Pearce Bespoke can terminate the franchise agreement and the potential consequences of such termination. Franchisees should seek legal counsel to fully understand their rights and obligations under the Franchise Agreement and applicable state laws. Additionally, franchisees should carefully manage their finances to avoid situations that could lead to an assignment of assets to creditors and potential termination of the franchise agreement.