Is the additional transfer fee for Beehive Homes in addition to other costs and expenses?
Beehive_Homes Franchise · 2025 FDDAnswer from 2025 FDD Document
- 13.5. Unauthorized Transfer. If Franchisee engages in an Unauthorized Transfer as provided in Section 13.2 or Section 13.6, Franchisee hereby covenants and promises to pay to Franchisor, in addition to all other costs and expenses provided for in this Agreement, an additional transfer fee in an amount equal to ten (10) times [5% times [12 times [the greater of (i) the average published monthly rate per resident of the Home during the 12 months preceding the Unauthorized Transfer, times the number of beds in the Home, or (ii) the average published monthly rate per resident of the home which has been in operation for the preceding 18 month and is in nearest geographic proximity to the Home , times the number of beds in the Home]]]. The parties hereto agree that this additional transfer fee is not a penalty, but the parties' best estimate of the anticipated damage to Franchisor resulting from the Unauthorized Transfer.
Source: Item 23 — RECEIPTS (FDD pages 34–123)
What This Means (2025 FDD)
According to Beehive Homes' 2025 Franchise Disclosure Document, if a franchisee engages in an unauthorized transfer, they must pay Beehive Homes an additional transfer fee. This fee is in addition to all other costs and expenses outlined in the Franchise Agreement.
The additional transfer fee is calculated as ten times the product of 5%, 12, and the greater of two amounts: (i) the average published monthly rate per resident of the Home during the 12 months preceding the Unauthorized Transfer, times the number of beds in the Home, or (ii) the average published monthly rate per resident of the home which has been in operation for the preceding 18 months and is in nearest geographic proximity to the Home, times the number of beds in the Home.
Beehive Homes specifies that this additional transfer fee is not considered a penalty. Instead, it is the parties' best estimate of the anticipated damage to Beehive Homes resulting from the unauthorized transfer. This highlights the importance Beehive Homes places on controlling who operates its franchises and ensuring compliance with the franchise agreement.