What section of the Pearce Bespoke Development Agreement discusses assignment of the contract by the franchisor?
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.
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 7 of the Development Agreement covers the assignment of the contract by Pearce Bespoke. Specifically, it states that the Development Agreement is 'Fully assignable and transferrable by us.' This means Pearce Bespoke has the right to transfer or assign the Development Agreement to another party without needing the franchisee's consent.
This clause is significant for potential Pearce Bespoke franchisees as it acknowledges that the franchisor can sell, transfer, or assign its rights and obligations under the Development Agreement to a third party. This could be another company, an individual, or any other legal entity. While the franchisee's daily operations might not be immediately impacted, the new owner could have different management styles, business strategies, or financial resources, which could eventually affect the franchisee's business.
Furthermore, Section 7 outlines various aspects related to the transfer of the Development Agreement by the franchisee, including the definition of 'transfer,' Pearce Bespoke's approval rights, conditions for approval, and Pearce Bespoke's right of first refusal. These provisions ensure that Pearce Bespoke maintains control over who becomes a developer within their system and under what conditions a transfer can occur. Franchisees should carefully review these sections to understand their rights and obligations regarding the transfer of their Development Agreement.