Can Pearce Bespoke terminate the Development Agreement if an Event of Default occurs?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
- 6.1 Events of Default. Any one or more of the following constitutes an "Event of Default" under this Agreement:
- (a) You fail to have open and operating the minimum number of Businesses specified in the Development Schedule by any Opening Deadline specified in the Development Schedule;
- (b) An Event of Default occurs under any Franchise Agreement, resulting in the termination of such Franchise Agreement; or
- (c) You breach or otherwise fail to comply fully with any other provision contained in this Agreement.
- 6.2 Our Remedies. If any Event of Default occurs under Section 6.1, we may, at our sole election: (i) declare this Agreement and any and all other rights granted to you under this Agreement to be immediately terminated and of no further force or effect; (ii) terminate any exclusive or territorial rights that you may have within the Development Area or otherwise under this Agreement; and/or (iii) exercise any other remedy we may have in law or equity as a result of an Event of Default hereunder. Upon termination of this Agreement for any other reason whatsoever, we will retain the Development Fee and you will not be relieved of any of your obligations, debts, or liabilities hereunder, including without limitation any debts, obligations, or liabilities which have accrued prior to such termination. All rights and remedies of the parties hereto shall be cumulative and not alternative, in addition to and not exclusive of any other rights or remedies which are provided for herein or which may be available at law or in equity in case of any breach, failure or default or threatened breach, failure or default of any term, provision or condition of this Agreement. The rights and remedies of the parties hereto shall be continuing and shall not be exhausted by any one or more uses thereof and may be exercised at any time or from time to time as often as may be expedient; and any option or election to enforce any such right or remedy may be exercised or taken at any time and from time to time. Notwithstanding anything to the contrary herein, a termination of this Agreement resulting from your failure to open and thereafter operate Businesses in accordance with the Development Schedule will not, in itself, constitute cause for us to terminate any previously executed Franchise Agreement in effect at the time of such termination.
Source: Item 23 — RECEIPTS (FDD pages 39–172)
What This Means (2025 FDD)
According to the 2025 Pearce Bespoke Franchise Disclosure Document, Pearce Bespoke has the right to terminate the Area Development Agreement if an Event of Default occurs. An Event of Default is defined as the failure to have the minimum number of businesses open and operating by the specified Opening Deadline in the Development Schedule, an Event of Default occurring under any Franchise Agreement resulting in its termination, or a failure to comply with any other provision in the Development Agreement.
If an Event of Default occurs, Pearce Bespoke has several options. They may declare the Development Agreement terminated with no further effect, terminate any exclusive or territorial rights the franchisee may have, and/or pursue any other legal or equitable remedy. Upon termination, Pearce Bespoke will retain the Development Fee, and the franchisee remains responsible for any outstanding obligations.
It is important to note that the termination of the Development Agreement due to failure to meet the development schedule does not automatically lead to the termination of any existing Franchise Agreements. This means that if a franchisee has already opened locations, those franchise agreements may remain in effect even if the Development Agreement is terminated. The rights and remedies available to both parties are cumulative and ongoing, and can be exercised as needed.