What law is the Pearce Bespoke Transfer Fee subject to?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Contribution | implementation | we reserve the right to implement | |
| one in the future, implemented by | |||
| Pearce Bespoke or the franchisees. | |||
| Local Marketing | Minimum 5% of your Gross | Minimum amount must be | See Note 5 below. See Note 6 below |
| Expenses | Sales | spent during each calendar | |
| year. | We reserve the right to increase to a | ||
| maximum of 6% upon 30 days' | |||
| written notice | |||
| Transfer Fee | Whichever is greater: | Before completion of | Subject to state law |
| (i) | transfer | ||
| $10,000 | |||
| or | |||
| (ii) | |||
| 25% of | |||
| the then current franchise | We will not charge Transfer Fee for | ||
| fee |
Source: Item 6 — OTHER FEES (FDD pages 11–15)
What This Means (2025 FDD)
According to Pearce Bespoke's 2025 Franchise Disclosure Document, the Transfer Fee is subject to state law. The transfer fee is due before the completion of the transfer. The fee is whichever is greater between $10,000 or 25% of the then-current franchise fee. However, Pearce Bespoke will not charge a Transfer Fee for transfers to immediate family members.
Transfer fees are common in franchising and usually cover the franchisor's administrative costs and training of the new franchisee. The fact that the Pearce Bespoke transfer fee is subject to state law means that the amount and conditions of the transfer may be regulated by the state in which the franchise is located. These laws vary by state and may impose certain requirements or limitations on the franchisor's ability to collect a transfer fee.
A prospective Pearce Bespoke franchisee should investigate the specific state laws governing franchise transfers in their state to understand their rights and obligations. They should also carefully review the Franchise Agreement to understand all the terms and conditions related to transferring the franchise and paying the transfer fee. It is also important to note the exception for transfers to immediate family members, which could be a significant benefit in certain circumstances.
Understanding the transfer fee and the applicable state laws is an important part of evaluating the Pearce Bespoke franchise opportunity. Franchisees should consult with a franchise attorney to ensure they fully understand their rights and obligations before signing the Franchise Agreement.