How does Pearce Bespoke intend to use the initial franchise fee?
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.
Based upon Franchisor's financial condition, the Illinois Office of the Attorney General has required a Surety Bond be executed and on file with them in the amount of the initial (and development) fee multiplied by the number of franchises to be sold in Illinois.
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to Pearce Bespoke's 2025 Franchise Disclosure Document, the initial franchise fee is non-refundable and fully earned by Pearce Bespoke on the date of the Franchise Agreement. This fee compensates Pearce Bespoke for the costs it incurs to set up the franchisee's business.
The costs covered by the initial franchise fee include training, territory evaluation, business overhead, and travel costs. These expenses are directly related to the initial services Pearce Bespoke provides to the franchisee to get their business operational.
Additionally, the document mentions that the Illinois Office of the Attorney General requires Pearce Bespoke to maintain a surety bond based on the initial franchise fee and the number of franchises to be sold in Illinois. This bond serves as a financial protection measure.