Is the Pearce Bespoke Transfer Fee subject to state law?
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 subject to state law. The transfer fee is whichever is greater: (i) $10,000 or (ii) 25% of the then-current franchise fee. This fee is due before the completion of the transfer. However, Pearce Bespoke will not charge a transfer fee for transfers to immediate family members.
The fact that the transfer fee is "subject to state law" means that the specific amount and conditions under which Pearce Bespoke can charge this fee may be regulated by the state in which the franchise is located. Some states have franchise laws that limit or regulate the fees that franchisors can charge for transfers, to protect franchisees from unreasonable or excessive costs.
A prospective Pearce Bespoke franchisee should investigate the franchise laws of their state to understand any regulations or limitations on transfer fees. They should also discuss with Pearce Bespoke what specific state laws apply and how those laws might affect the transfer fee in their particular situation. Understanding these regulations is crucial for financial planning and for making informed decisions about the potential sale or transfer of the franchise in the future.