What happens if the Pearce Bespoke franchisee does not pay the audit costs before the expiration of the term?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
A. Term.
The term of this Agreement will be for ten (10) years commencing on the Effective Date, unless terminated sooner in accordance with the terms hereof.
B. Renewal.
Franchisee will have the right to renew its Pearce Bespoke franchise for the Franchised Territory for two (2) successive five (5) year terms, provided Franchisee meets the following conditions:
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- Franchisee has given Franchisor written notice at least one hundred eighty (180) days before the end of the term of this Agreement of its intention to renew; and
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- Franchisee has complied with all of the material provisions of this Agreement, including the payment of all monetary obligations owed by Franchisee to Franchisor and its affiliates and suppliers, and has complied with Franchisor's material operating and brand standards and procedures and meets all current brand standards during the term of the Franchise Agreement; and
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- Franchisee has at its expense made such reasonable capital expenditures necessary to replace and modernize the supplies, items, and custom equipment in Franchisee's business so that Franchisee's business reflects the then current requirements of a new Pearce Bespoke Franchise; and
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Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to the 2025 Pearce Bespoke Franchise Disclosure Document, a franchisee's failure to pay audit costs before the expiration of the current term can impact their ability to renew their franchise agreement. Specifically, to renew the franchise for two successive five-year terms, the franchisee must comply with all material provisions of the agreement, including the payment of all monetary obligations owed to Pearce Bespoke.
Pearce Bespoke may conduct financial and operational audits to determine compliance with brand standards. If deficiencies are identified during the audit, they must be satisfied before the current term expires. The franchisee is responsible for covering the costs of these audits, including transportation, lodging, meals, and other expenses incurred by Pearce Bespoke. These costs are payable upon demand before the expiration of the existing term.
Therefore, if a Pearce Bespoke franchisee fails to pay the audit costs before the expiration of their current term, they will not have complied with all material provisions of the Franchise Agreement. This non-compliance means they will not meet the conditions necessary to renew their franchise for additional terms. Paying these costs on time is essential for franchisees who wish to continue operating their Pearce Bespoke franchise beyond the initial term.