Can Pearce Bespoke require an audit of the franchisee's business as a condition of renewal?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
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- At Franchisor's discretion, assist Franchisor or its designee with an audit of the Pearce Bespoke Franchise, which shall be conducted by Franchisor or its designee, including without limitation, a financial audit and an operational audit to determine their compliance with then current brand standards. Any deficiencies identified during the audit must be satisfied prior to the expiration of the then current term. If any audit reveals any deficiencies the costs incurred by Franchisor in connection with any such audit are payable upon demand by Franchisee prior to the expiration of the then existing term, including any audit costs, transportation, lodging, meals, and any other expenses incurred.
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to Pearce Bespoke's 2025 Franchise Disclosure Document, Pearce Bespoke can require an audit of the franchisee's business as a condition of renewal. Specifically, prior to renewal, Pearce Bespoke can request that the franchisee assist with a financial and operational audit to ensure compliance with brand standards.
The audit is conducted at Pearce Bespoke's discretion, and any deficiencies identified must be resolved before the current term expires. This means a prospective franchisee should be prepared to address any issues found during the audit to qualify for renewal.
Furthermore, if the audit reveals any deficiencies, the franchisee is responsible for covering the costs incurred by Pearce Bespoke for the audit. These costs include audit expenses, transportation, lodging, meals, and any other related expenses. This financial responsibility should be considered by potential franchisees as part of the renewal requirements.
In summary, Pearce Bespoke retains the right to audit a franchisee's business before renewal, and the franchisee must rectify any identified issues and bear the costs of the audit to successfully renew their franchise agreement.