What is the purpose of the royalty revenues collected by Pearce Bespoke?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
enue is recognized upon the execution of the franchise agreement. This fee is assessed for each additional clothier added to a franchised location.
Franchise Royalties
Franchise royalties are calculated based upon either 10% of franchisee gross revenue or a minimum of $100 per week (as defined in the franchise agreement). In year 2 of operation the minimum fee will increase to $150 per we
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 39)
What This Means (2025 FDD)
According to the 2025 Pearce Bespoke Franchise Disclosure Document, franchise royalties are a primary revenue source for the company. These royalties are calculated as either 10% of the franchisee's gross revenue or a minimum weekly fee, whichever is greater.
The minimum weekly royalty fee for Pearce Bespoke franchisees increases over time. In the first year of operation, the minimum is $100 per week. This increases to $150 per week in the second year, and then to $200 per week in the third year and beyond.
Pearce Bespoke collects and recognizes these royalties as revenue on a weekly basis, based on the previous week's sales. This means that franchisees will need to accurately track and report their gross revenue to Pearce Bespoke on a weekly basis to ensure proper royalty payments. The increasing minimum royalty fee should also be factored into a franchisee's financial projections to ensure they can maintain profitability as their business matures.