Can Pearce Bespoke terminate the Franchise Agreement if a franchisee's manager is convicted of a felony?

According to Pearce Bespoke's 2025 Franchise Disclosure Document, Pearce Bespoke has the option to terminate the Franchise Agreement if a franchisee's manager is convicted of a felony. Specifically, if a franchisee or any of its managers, directors, officers, or majority shareholders are convicted of, or plead guilty to or no contest to any felony, Pearce Bespoke may choose to terminate the agreement. This clause also applies if any of those parties are charged with violating any law that, at Pearce Bespoke's sole discretion, adversely impacts the reputation of the franchised business.

This provision gives Pearce Bespoke significant power to protect its brand and reputation. A felony conviction of a manager, regardless of whether it is directly related to the business, could be grounds for termination. This could have severe consequences for the franchisee, including the loss of their business and the potential for further financial penalties related to the termination.

It is important for prospective Pearce Bespoke franchisees to understand the implications of this clause. They should carefully vet their managers, directors, officers, and majority shareholders to minimize the risk of a felony conviction that could lead to termination. Franchisees should also seek legal counsel to fully understand their rights and obligations under the Franchise Agreement, particularly regarding termination clauses.