Under what circumstances can a Pearce Bespoke franchisee solicit Non-Exclusive Customers?

According to Pearce Bespoke's 2025 Franchise Disclosure Document, a franchisee is generally restricted from soliciting customers outside of their designated territory, referred to as "Non-Exclusive Customers." However, there are two specific exceptions where a Pearce Bespoke franchisee may solicit Non-Exclusive Customers. These exceptions are if the franchisee is solicited by the customer first, or if the franchisee has a prior verifiable relationship with the Non-Exclusive Customer.

Even when these conditions are met, allowing a Pearce Bespoke franchisee to engage with Non-Exclusive Customers, there is a financial obligation. The franchisee must pay an Encroachment Fee, which is twenty percent (20%) of the gross sales attributed to sales made to Non-Exclusive Customers outside of the franchisee's territory. This fee is paid either to Pearce Bespoke or to the incumbent franchise owner, presumably the franchisee whose territory is being encroached upon.

This policy aims to protect the territorial interests of existing Pearce Bespoke franchisees while still allowing for some flexibility in serving customers who may have an existing connection with a particular franchisee. It is important for prospective franchisees to understand these restrictions and the associated fees, as they can impact the profitability of sales made outside of their designated territory. Franchisees should maintain careful records of customer interactions to document any prior relationships or instances of being solicited to ensure compliance with Pearce Bespoke's policy and accurate calculation of Encroachment Fees.