What section of the Pearce Bespoke Development Agreement defines 'cause' for termination related to non-curable defaults?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
fail to have open and operating, the minimum number of Businesses specified in the Development | | Provision | Section in Development Agreement | Summary | |-------------------------------------------------------------------------------------------|----------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | | | Schedule by any Opening Deadline specified in the Development Schedule; any Franchise Agreement is terminated a result of default; or you breach or otherwise fail to comply fully with any other provision of the Development Agreement. Subject to state law. | | i. Franchisee's obligations on termination/non-renewal | Section 6.2 | You will lose the right to continue to develop Franchised Businesses in your Development Area. | | j. Assignment of contract by us | Section 7 | Fully assignable and transferrable by us. | | k. "Transfer" by franchisee – | Section 7 | Includes transfer of the Development Agreement, any | | definition | | interest in the Development Agreement, or, if you are a business entity, any interest in the entity. | | l. Our approval of transfer by | Section 7 | We have the right to approve or not approve all transfers | | franchisee | | in our sole discretion. | | m. Conditions for our approval of | Section 7 | We have sole discretion in setting conditions for our | | transfer | | approval of a transfer. | | n. Our right of first refusal to acquire franchisee's business | Section 7 | We have the first right of refusal on all transfer, exercisable withing 30 days of receiving an executed copy of the contract of transfer. | | o. Our option to purchase your | Not Applicable | Not Applicable | | business | | | | p. Death or disability of | Not Applicable | We have the right approve or disapprove any transfer in | | franchisee | | our sole discretion. | | q.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP (FDD pages 31–34)
What This Means (2025 FDD)
According to Pearce Bespoke's 2025 Franchise Disclosure Document, Section 6.1 of the Development Agreement defines 'cause' for termination related to non-curable defaults. Specifically, this section states that Pearce Bespoke can terminate the Development Agreement if the franchisee fails to have the minimum number of businesses open and operating by the deadlines specified in the Development Schedule. Termination can also occur if any Franchise Agreement is terminated due to default, or if the franchisee breaches or fails to comply with any other provision of the Development Agreement.
This means that a Pearce Bespoke developer could face termination of their Development Agreement if they do not meet the milestones for opening new locations as outlined in the Development Schedule. Additionally, if any of the individual franchise agreements under the development agreement are terminated due to the franchisee's default, the entire Development Agreement could be at risk. The FDD also notes that all of these stipulations are subject to state law, which means that the specific enforcement and interpretation of these clauses can vary depending on the state.
It is important for prospective Pearce Bespoke developers to carefully review Section 6.1 of the Development Agreement and the Development Schedule to fully understand their obligations and the potential consequences of failing to meet those obligations. They should also consult with an attorney to understand how state law might affect the enforcement of these provisions. Understanding these terms is crucial for managing the risk of termination and ensuring the long-term success of the development venture.