What does Item 17 of the Pearce Bespoke Franchise Disclosure Document pertain to?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 17: RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP]
| 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. |
| Provision | Section in Franchise Agreement | Summary offering Pearce Bespoke a right of first refusal; if assignee is your spouse or child, no transfer fee is required. | |
| q. | Non-competition covenants during the term of the franchise | Section 18(A) | No direct or indirect involvement in any resale mobile business involving the purchase and/or sale of custom clothing and accessories other than the one authorized in the Franchise Agreement, without Pearce Bespoke’s prior written consent, subject to state law. |
| r. | Non-competition covenants after the franchise is terminated or expires | Sections 18(B) and (C) | No direct or indirect involvement in any resale mobile business involving the purchase and/or sale of custom clothing and accessories for 2 years within 10 miles of the Franchise or any other Pearce Bespoke Franchise. If the franchisee is in breach of this provision, the noncompetition period will be extended for a period of time equal to the time the franchisee operated a competing business, subject to state law. |
| s. | Modification of the | Sections 3I, 8(N) and 20(A) | Manuals, list of authorized Marks and required goods |
| agreement | and (B) | subject to change. | |
| t. | Integration/merger clause | Section 20(G); | Only the terms of the Franchise Agreement are binding (subject to state law). Any other promises may not be enforceable. Nothing in the Franchise Agreement or any related document is intended to disclaim the representations made in this Disclosure Document. |
| u. | Dispute resolution by arbitration or mediation | Section 19(A) | Except for certain claims, all disputes must be arbitrated in Huntersville, North Carolina (subject to state law). |
| v. | Choice of forum | Sections 18(D) and 19 | All disputes that are subject to arbitration must be arbitrated in Huntersville, North Carolina. Other claims may be decided by any court of competent jurisdiction (subject to APPLICABLE state law). |
| w. | Choice of law | Section 20(D) | Apply law of North Carolina (subject to APPLICABLE state law). |
| Provision | Section in Development Agreement | Summary | |
| a. Length of the franchise term | Section 5 | The term expires upon the deadline to develop the Businesses specified in the Development Schedule or upon the development of all Businesses. | |
| b. Renewal or extension of the | Not Applicable | Not Applicable | |
| term | |||
| c. Requirements for franchisee to | Not Applicable | Not Applicable | |
| renew or extend | |||
| d. Termination by franchisee | Not Applicable | Not Applicable | |
| e. Termination by us without | Not Applicable | Not Applicable | |
| cause | |||
| f. Termination by us with cause | Section 6.1 | We can terminate only if you default (see (g.) and (h.) below). Subject to state law. | |
| g. “Cause” defined – curable | Not Applicable | Not Applicable | |
| defaults | |||
| h. “Cause” defined – non-curable | Section 6.1 | You fail to have open and operating, the minimum | |
| defaults | number of Businesses specified in the Development |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP (FDD pages 31–34)
What This Means (2025 FDD)
According to the 2025 Pearce Bespoke Franchise Disclosure Document, Item 17 outlines the provisions regarding renewal, termination, transfer, and dispute resolution within the franchise relationship. This section is crucial for prospective franchisees as it details the conditions under which the franchise agreement can be renewed, terminated by either party, or transferred to another owner. It also covers how disputes between the franchisee and Pearce Bespoke will be resolved, including whether arbitration or mediation is required.
Item 17 includes summaries of key sections within both the Franchise Agreement and the Development Agreement. For the Franchise Agreement, it specifies the length of the franchise term (10 years), the conditions for renewal (advance notice, signing the current agreement, paying a renewal fee, remodeling, meeting brand standards, securing lease extension, and compliance), and the grounds for termination by either the franchisee or Pearce Bespoke. For example, Pearce Bespoke can terminate the Franchise Agreement if the franchisee defaults, subject to state law, and the franchisee typically has 30 days to cure curable defaults.
Regarding the Development Agreement, Item 17 outlines the term's expiration upon the development deadline or completion of all businesses. It also states that Pearce Bespoke can terminate the agreement if the franchisee defaults, such as failing to have the minimum number of businesses open and operating by the specified deadline. The item also addresses non-competition covenants during and after the franchise term, modifications to the agreement, and integration clauses, which specify that only the terms of the Franchise Agreement are binding, subject to state law.
Furthermore, Item 17 clarifies dispute resolution processes, indicating that except for certain claims, all disputes must be arbitrated in Huntersville, North Carolina, subject to state law. It also specifies that North Carolina law applies to the agreements. The item emphasizes the importance of reading the full provisions in the agreements attached to the Disclosure Document to fully understand these rights and obligations. Additionally, it notes that applicable state law may require additional disclosures, which can be found in Exhibit I: State Specific Addenda.