How is the minimum gross sales requirement determined for a Pearce Bespoke franchise in Year 4 and beyond?

Based on the 2025 Pearce Bespoke Franchise Disclosure Document, the franchisee acknowledges that as the Pearce Bespoke franchise system expands, the franchisor may revise advertising obligations. Upon 30 days' written notice, Pearce Bespoke can increase the franchisee's minimum advertising expenditures up to a total of 6% of the franchisee's Gross Sales. This clause suggests that while there isn't a fixed minimum gross sales requirement outlined for Year 4 and beyond, the advertising expenditure, which is linked to gross sales, can be adjusted.

This means that a Pearce Bespoke franchisee's financial obligations related to advertising could increase as the franchise system grows. The increase is capped at 6% of gross sales, providing some predictability. However, the franchisor has the discretion to adjust this percentage with 30 days' notice, which could impact the franchisee's profitability and financial planning.

It is important for prospective Pearce Bespoke franchisees to understand how these advertising expenditure adjustments could affect their business. They should inquire about the typical trajectory of these adjustments, the factors that trigger them, and how they are communicated to franchisees. Understanding these aspects will help in forecasting expenses and assessing the overall financial viability of the franchise over the long term.