After the Beehive Homes agreement terminates, expires, or is transferred, for how long does the non-competition covenant apply?
Beehive_Homes Franchise · 2025 FDDAnswer from 2025 FDD Document
- 12.1. Noncompetition. During the Term of this Agreement and for a period of three (3) years after the Transfer, termination or expiration of this Agreement, or if later, the Franchisee's cessation of operations at the Location, the Franchisee shall not, and if Franchisee is a corporation or other legal entity, its officers, directors, shareholders, partners, managers, members and Equity Owner(s) shall not, in any capacity, directly or indirectly, except with the written consent of Franchisor, engage in any business which is the same or substantially similar to the type of business covered by this Agreement in any location for which any of the Names and Marks is registered. The Franchisee will not employ or seek to employ any person who is at the same time employed by any business operated by Franchisor or any of its Affiliates, franchisees or other licensees and will not, directly or indirectly, induce any such person to leave his or her employment unless the Franchisee has obtained the prior written approval of Franchisor.
Source: Item 23 — RECEIPTS (FDD pages 34–123)
What This Means (2025 FDD)
According to Beehive Homes' 2025 Franchise Disclosure Document, the non-competition covenant lasts for three years after the agreement's transfer, termination, or expiration. This restriction also applies, if later, to the franchisee's cessation of operations at the location.
This means that for a period of three years after the franchise agreement ends (or after you stop operating the Beehive Homes location, if that's later), you, as the franchisee, and, if the franchisee is a corporation or other legal entity, its officers, directors, shareholders, partners, managers, members and Equity Owner(s) are restricted from engaging in any similar business within any location where Beehive Homes' Names and Marks are registered. This prevents former franchisees from directly competing with the Beehive Homes system shortly after leaving it.
Additionally, during this restricted period, franchisees are prohibited from employing or attempting to employ anyone currently working for Beehive Homes, its affiliates, franchisees, or licensees. They also cannot encourage these individuals to leave their employment without prior written approval from Beehive Homes. This clause protects Beehive Homes from losing valuable employees to a former franchisee's competing business.