How does the minimum royalty payment for a Pearce Bespoke franchise change from year four onwards?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
| Period Following Original | Minimum Royalty Payment |
|---|---|
| Opening Date | |
| Year 1 | $100 per week |
| Year 2 | $150 per week |
| Year 3 | $200 per week |
| Year 4+ | 10% increase over previous year minimum |
Source: Item 12 — TERRITORY (FDD pages 27–29)
What This Means (2025 FDD)
According to Pearce Bespoke's 2025 Franchise Disclosure Document, the minimum royalty payment schedule increases over the first three years and then changes in year four. During the first year of operation, a franchisee must pay a minimum royalty of $100 per week. This increases to $150 per week in the second year, and then to $200 per week in the third year.
Starting in year four, the minimum royalty payment changes to a percentage-based increase. Specifically, the minimum royalty payment increases by 10% over the previous year's minimum. This means that in year four, the minimum weekly royalty payment will be $220, which is 10% more than the $200 required in year three.
This escalating royalty structure means that Pearce Bespoke franchisees need to plan for increasing financial obligations over time, even if their gross sales do not increase. It also incentivizes franchisees to grow their business to offset the higher royalty payments. Prospective franchisees should carefully consider these increasing minimums when projecting their potential profitability.