Does the restriction on selling a controlling interest in a Pearce Bespoke franchise apply to a series of related transactions?
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:
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to Pearce Bespoke's 2025 Franchise Disclosure Document, the restriction on transferring a controlling interest in the franchise applies to both single transactions and a series of transactions. A "controlling" interest includes a proposed transfer of fifty percent (50%) or more of the Capital Stock of a corporate Franchisee.
This means that a franchisee cannot avoid the transfer restrictions by breaking up the sale of their business or stock into multiple smaller transactions. Pearce Bespoke retains the right to approve any transfer of a controlling interest, ensuring that new owners meet their standards and are capable of operating the franchise successfully. This protects the brand and the interests of other franchisees.
Pearce Bespoke requires prior written consent for such transfers, but states that it will not unreasonably withhold consent, provided certain conditions are met. These conditions include satisfying all monetary obligations to Pearce Bespoke and suppliers, executing a written agreement to observe post-term obligations, and ensuring the transferee meets Pearce Bespoke's standards for new franchisees. The transferee must also not be a competitor of Pearce Bespoke.