To what provisions is the sale, transfer, or assignment of a Pearce Bespoke franchise to a third party subject?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
Pearce Bespoke Franchisee (and its partners and shareholders, if any) will not transfer (whether voluntary or
involuntary), assign or otherwise dispose of, in one or more transactions, Franchisee's business, all or substantially all of the assets of Franchisee's business, this Agreement or any controlling interest in Franchisee (a "controlling" interest will include a proposed transfer of fifty percent (50%) or more of the Capital Stock of a corporate Franchisee) without Franchisor's prior written consent, except to trusts established for Franchisee's benefit. Franchisor will not unreasonably withhold its consent to a transfer, subject to any or all of the following conditions described below which Franchisor may deem necessary:
All of Franchisee's accrued monetary obligations to Franchisor and suppliers will have been satisfied, and Franchisee is not in default under this Agreement;
Franchisee executes a written agreement in a form satisfactory to Franchisor, in which Franchisee covenantsto observe all applicable post-term obligations and covenants contained in this Agreement;
The transferee-franchisee enters into a written agreement in a form satisfactory to Franchisor assuming and agreeing to discharge all of Franchisee's obligations and covenants under this Agreement for the remainder of its term or, at Franchisor's option, executes Franchisor's then-current standard form of franchise agreement which may not contain any further rights of renewal, but may contain royalty rates and advertising contributions (which may be different than those contained in this Agreement), and an altered Franchised Territory;
The transferee-franchisee is not a competitor of Franchisor or the Business system and is approved by Franchisor and demonstrates to Franchisor's satisfaction that he/she meets Franchisor's managerial, financial, and business standards for new franchisees, possesses a good business reputation and credit rating, and has the aptitude and ability to conduct the franchised business.
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to Pearce Bespoke's 2025 Franchise Disclosure Document, a franchisee cannot transfer, assign, or dispose of their business, assets, the Franchise Agreement, or any controlling interest (defined as 50% or more of the capital stock) without the prior written consent of Pearce Bespoke, except to trusts established for the franchisee's benefit. Pearce Bespoke will not unreasonably withhold consent but may impose necessary conditions.
These conditions include satisfying all accrued monetary obligations to Pearce Bespoke and suppliers, and ensuring the franchisee is not in default of the Franchise Agreement. The franchisee must also execute a written agreement to observe all applicable post-term obligations. The prospective buyer must enter into an agreement satisfactory to Pearce Bespoke, assuming all obligations under the existing agreement for the remainder of its term. Alternatively, at Pearce Bespoke's option, the buyer may be required to execute the then-current standard franchise agreement, which may not include further renewal rights and could have different royalty rates, advertising contributions, and an altered franchised territory.
Furthermore, the transferee must not be a competitor of Pearce Bespoke and must meet Pearce Bespoke's managerial, financial, and business standards for new franchisees. They must also possess a good business reputation, credit rating, and demonstrate the aptitude and ability to conduct the franchised business. These stipulations ensure that any transfer maintains the standards and integrity of the Pearce Bespoke brand, while also protecting the interests of the franchisor and the existing network of franchisees.
These transfer conditions are typical in franchising, as they allow Pearce Bespoke to maintain control over who operates under their brand name and to ensure that new franchisees are qualified and capable. A prospective franchisee should carefully consider these conditions and discuss any concerns with Pearce Bespoke before entering into a franchise agreement.