How is the 'then current franchise' fee determined when calculating the Transfer Fee for Pearce Bespoke?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Contribution | implementation | we reserve the right to implement | |
| one in the future, implemented by | |||
| Pearce Bespoke or the franchisees. | |||
| Local Marketing | Minimum 5% of your Gross | Minimum amount must be | See Note 5 below. See Note 6 below |
| Expenses | Sales | spent during each calendar | |
| year. | We reserve the right to increase to a | ||
| maximum of 6% upon 30 days' | |||
| written notice | |||
| Transfer Fee | Whichever is greater: | Before completion of | Subject to state law |
| (i) | transfer | ||
| $10,000 | |||
| or | |||
| (ii) | |||
| 25% of | |||
| the then current franchise | We will not charge Transfer Fee for | ||
| fee |
Source: Item 6 — OTHER FEES (FDD pages 11–15)
What This Means (2025 FDD)
According to Pearce Bespoke's 2025 Franchise Disclosure Document, the transfer fee is calculated as whichever amount is greater: $10,000 or 25% of the then-current franchise fee. This fee is payable before the completion of the transfer, but Pearce Bespoke will not charge a transfer fee for transfers to immediate family members.
For a prospective Pearce Bespoke franchisee, this means that if they decide to sell their franchise, they will need to pay a transfer fee to Pearce Bespoke. The fee is either a flat $10,000 or 25% of the current franchise fee, whichever is higher. This could be a significant cost to consider when planning an exit strategy.
It is important to note that the transfer fee does not apply to transfers to immediate family members. This could be a benefit for franchisees who wish to pass their business on to their children or other close relatives. Franchisees should confirm with Pearce Bespoke what documentation is required to prove the familial relationship to qualify for this waiver.
Transfer fees are a common practice in franchising, intended to compensate the franchisor for the work involved in approving a new franchisee and updating the franchise agreement. The Pearce Bespoke transfer fee is structured as either a flat fee or a percentage of the current franchise fee, which is a fairly typical approach in the franchise industry. Franchisees should be aware of this fee and factor it into their long-term financial planning.