Does Pearce Bespoke have a right of first refusal to acquire the franchisee's business in a transfer scenario?

According to Pearce Bespoke's 2025 Franchise Disclosure Document, Pearce Bespoke does possess a right of first refusal regarding the transfer of a franchisee's business. Specifically, Pearce Bespoke has the first right of refusal on all transfers related to the Development Agreement.

This right of first refusal allows Pearce Bespoke to step in and acquire the franchisee's business or development rights under the same terms and conditions as a proposed third-party buyer. Pearce Bespoke has 30 days to exercise this right after receiving an executed copy of the transfer contract. This provision is found within Section 7 of the Development Agreement.

For a prospective franchisee, this means that before selling their Pearce Bespoke franchise or development rights to someone else, they must first offer the company the opportunity to buy it themselves. This could potentially delay or complicate a sale, as the franchisee needs to wait for Pearce Bespoke's decision. However, it also ensures that Pearce Bespoke has control over who enters their franchise system, maintaining brand consistency and quality.

It is important to note that this right of first refusal applies to the Development Agreement. The FDD does not specify if a similar right exists within the standard Franchise Agreement. A prospective franchisee should clarify with Pearce Bespoke whether a right of first refusal exists for individual franchise transfers, in addition to the Development Agreement.