Instead of the initial franchise fee, what fee does a renewing Pearce Bespoke franchisee pay?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
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 paid a Renewal Fee equal to the greater of (i) Five Thousand Dollars ($5,000.00), or (ii) twenty-five percent (25%) of the then-current franchise fee to Franchisor at least thirty (30) days before the expiration of the initial (and any renewal) term of this Agreement expires; and
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- Execute prior to the expiration of the then existing term the then-current Franchise Agreement, provided, however, that Franchisee will be required to pay the Renewal Fee in lieu of the Initial Franchise Fee stated in such Franchise Agreement, and that such Franchise Agreement may not contain any further rights of renewal, but may contain continuing rates
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to the 2025 Pearce Bespoke Franchise Disclosure Document, a renewing franchisee does not pay the initial franchise fee again. Instead, the franchisee must pay a renewal fee. The renewal fee is the greater of $5,000 or 25% of the then-current initial franchise fee. This fee must be paid to Pearce Bespoke at least 30 days before the expiration of the current franchise agreement term.
In addition to the renewal fee, the Pearce Bespoke franchisee must meet other conditions to be eligible for renewal. These conditions include providing written notice of intent to renew at least 180 days before the end of the current term, complying with all material provisions of the franchise agreement (including financial obligations and brand standards), and making necessary capital expenditures to modernize the business to meet current brand standards. Pearce Bespoke also has the discretion to audit the franchise to ensure compliance with brand standards, with the franchisee responsible for covering the costs of the audit if deficiencies are found.
The renewal term for a Pearce Bespoke franchise is for two successive five-year terms, provided these conditions are met. Upon renewal, the franchisee must execute the then-current Franchise Agreement, but will pay the renewal fee instead of the initial franchise fee. It is important to note that the renewed Franchise Agreement may not contain any further rights of renewal, but may contain continuing rates.
This renewal structure is fairly typical in franchising, where franchisors charge a renewal fee that is less than the initial franchise fee. This provides an incentive for franchisees to continue operating under the brand while ensuring that they remain compliant with current standards and contribute to the ongoing success of the Pearce Bespoke system.