What is the purpose of the 'Total Development Fee' section on the Pearce Bespoke receipt?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
| Effective Date (First Paragraph): | |
|---|---|
| Franchisee's Name: | |
| Franchisee's State of Organization (if applicable): | |
| Development Area (Section 1): [provide list of counties or zip codes which make up the Development | |
| Area] [attach map if necessary] | |
| Total Development Fee (Section 2): | |
| $ | |
| Development Schedule (Section 3): You agree to establish and operate a total of Businesses | |
| within the Development Area during the term of this Agreement. The Businesses must be open and | |
| operating in accordance with the following Development Schedule: |
2. Fees
Upon execution of this Agreement, you must pay us a development fee in the amount specified in Exhibit A (the "Development Fee"), which is based on the initial franchise fee you must pay for each Mobile Franchise that you develop (the "Franchise Fee", which is also specified in Exhibit A). The Development Fee will be credited towards 100% of the Franchise Fee due under the Franchise Agreement for each Mobile Franchise that you develop pursuant to this Agreement, including the Initial Franchise Agreement. The Development Fee is fully earned by us when we and you sign this Agreement and is non-refundable, even if you do not comply with the Development Schedule.
Source: Item 23 — RECEIPTS (FDD pages 39–172)
What This Means (2025 FDD)
According to Pearce Bespoke's 2025 Franchise Disclosure Document, the 'Total Development Fee' section on the receipt associated with the Area Development Agreement serves to specify the amount a franchisee must pay upon the execution of the agreement. This fee is detailed in Exhibit A of the agreement. The development fee is directly related to the initial franchise fee required for each Mobile Franchise that the franchisee intends to develop.
The document clarifies that the Development Fee covers a portion of the Franchise Fee due under each subsequent Franchise Agreement for each Mobile Franchise developed under the Area Development Agreement, including the Initial Franchise Agreement. Specifically, the Development Fee contributes to 100% of these future Franchise Fees.
It is important to note that Pearce Bespoke considers the Development Fee fully earned once the Area Development Agreement is signed by both parties. This fee is non-refundable, regardless of whether the franchisee fulfills the Development Schedule outlined in the agreement. This means that if a franchisee fails to open the agreed-upon number of locations within the specified timeframe, they will not receive a refund of the Development Fee.