How is the minimum weekly royalty payment determined for a Pearce Bespoke franchise in Year 4 and beyond?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
ar 2 | $75,000 | | Year 3 | $100,000 | | Year 4 + | 10% increase over previous year minimum | Franchise will pay a Minimum Weekly Royalty Fee as set forth in the table below and in accordance with Section 5(C):
| Period Following | Minimum Royalty Payment |
|---|
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to Pearce Bespoke's 2025 Franchise Disclosure Document, the minimum weekly royalty payment for a franchise in Year 4 and beyond is determined by a 10% increase over the previous year's minimum.
This means that after the initial three years of operation, the minimum royalty payment will increase annually. For example, if the minimum royalty payment in Year 3 is $200 per week, then in Year 4, the minimum would increase by 10% of $200, resulting in a minimum of $220 per week. This escalating minimum royalty payment means that franchisees must increase their sales to maintain profitability as they continue in business.
It's important to note that the franchisee will pay the greater of 10% of gross sales or the minimum weekly royalty fee. If 10% of a franchisee's gross sales exceeds the minimum weekly royalty payment, the franchisee will pay 10% of gross sales. This ensures that Pearce Bespoke receives a royalty payment that reflects the franchisee's actual sales performance, while also establishing a baseline royalty payment.