Does Pearce Bespoke receive compensation from Approved Suppliers based on the franchisees' transactions?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
Pearce Bespoke may provide certain administrative, technical, design, and advisory services and data to a limited number of Approved Suppliers and other suppliers. We and/or our affiliates may negotiate supply contracts with our Approved Suppliers or other suppliers under which we are able to purchase products, equipment, supplies, services, and other items at a price that will benefit us and our franchisees. We and/or our affiliate(s) may receive payments or other compensation from Approved Suppliers or any other suppliers on account of these suppliers' dealings with us, you, or other franchises in the Business System, such as barters, cash, credit (regardless of collection), rebates, allowances, commissions, or any other forms of compensation. We may use any amountsthat we receive from Approved Suppliers and other suppliers for any purpose that we deem appropriate as a result of any and all transactions with franchisees.
Pearce Bespoke is an Approved Supplier for certain items for which you are contractually obligated to purchase in the operation of your Franchise. Pearce Bespoke, its officers and/or persons affiliated with us, may now or in the future own an interest in Pearce Bespoke and be Approved Suppliers of certain items of the Business System. Pearce Bespoke officers do not own any interest in any Approved Supplier. Approved Supplier items include, but shall not limited to, recruiting services, computer hardware, software, collaboration and communication services, telephone, information management system, credit/debit card processing, criminal history background checks, email marketing, online accounting, virtual phone systems and client online surveys. You must license the POS/CRM software and purchase the computer hardware components for the POS System (the "POS System") either from us or a third-party vendor which may be modified from time to time in the Manuals. In the last fiscal year ending on December 31, 2023, we had total revenues of $572,535 of which $234,000, or 40.1%, was derived in revenue from required franchisee purchases or leases. Our affiliates have not received any other rebates, discounts or other material consideration from any other suppliers based on your required purchases of products, supplies or equipment.
The products or services we require you to purchase or lease from an Approved Supplier, or purchase or lease in accordance with Business System's standards and specifications, are referred to collectively as your "Required Purchases." We estimate that your Required Purchases, purchases from Approved Suppliers and purchases that must meet our specifications in total will be about 65% - 80% of your total purchases to establish the Franchise and about 65% - 80% of your purchases to continue the operation of your Franchise.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 19–20)
What This Means (2025 FDD)
According to Pearce Bespoke's 2025 Franchise Disclosure Document, Pearce Bespoke and its affiliates may receive compensation from Approved Suppliers based on the suppliers' dealings with franchisees. This compensation can take various forms, including barters, cash, credit, rebates, allowances, or commissions. Pearce Bespoke has the discretion to use these funds for any purpose they deem appropriate. This arrangement is common in franchising, where franchisors often negotiate deals with suppliers to benefit from volume purchasing and other incentives.
For a prospective Pearce Bespoke franchisee, this means that a portion of the money they spend with Approved Suppliers may indirectly benefit the franchisor. While this is a common practice, it's important for franchisees to understand how these arrangements work and whether they are receiving competitive pricing and quality from the Approved Suppliers. The FDD also indicates that in the last fiscal year ending December 31, 2023, Pearce Bespoke had total revenues of $572,535, of which $234,000 (40.1%) was derived from required franchisee purchases or leases.
It is also important to note that Pearce Bespoke is an Approved Supplier for certain items that franchisees are contractually obligated to purchase. These items include recruiting services, computer hardware, software, collaboration and communication services, and other services. This dual role as both franchisor and supplier could create potential conflicts of interest, so franchisees should carefully evaluate the pricing and quality of these required purchases. Franchisees are required to purchase an estimated 65% - 80% of their total purchases to establish the Franchise and about 65% - 80% of their purchases to continue the operation of their Franchise from approved or specified suppliers.