When is the initial franchise fee for a Pearce Bespoke franchise fully earned and payable?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee will pay Franchisor a non-refundable Initial Franchise Fee equal to the amount listed in ATTACHMENT A - FRANCHISEE SPECIFIC TERMS of this Agreement, which will be fully earned and payable on the date of this Agreement. The Initial Franchise Fee payable by Franchisee is payment to Franchisor for the costs that it will incur to get Franchisee into business including costs Franchisor incurs for training, territory evaluation, business overhead costs, travel costs, and for the other initial services Franchisor provides hereunder.
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to the 2025 Pearce Bespoke Franchise Disclosure Document, the initial franchise fee is fully earned and payable on the date of the Franchise Agreement. This fee is non-refundable. Pearce Bespoke states that the initial franchise fee compensates them for the costs they incur to get the franchisee into business. These costs include training, territory evaluation, business overhead, travel, and other initial services.
For a prospective Pearce Bespoke franchisee, this means that once the Franchise Agreement is signed, the initial franchise fee is due and not refundable, regardless of whether the business ever opens or becomes successful. This is a standard practice in franchising, as the franchisor incurs upfront costs in evaluating the franchisee and providing initial training and support.
However, there is an addendum for Minnesota franchisees. In the State of Minnesota, Pearce Bespoke will defer the payment of the initial franchise fee, development fee, and any other initial payment until all of their material pre-opening obligations have been satisfied and the business is open and operating. The franchisee must still execute the Franchise Agreement prior to looking for a site or beginning training.