After the assignment, is the Assignor released from their obligations to Beehive Homes under the Franchise Agreement?
Beehive_Homes Franchise · 2025 FDDAnswer from 2025 FDD Document
- Assignor agrees to remain personally bound by, and personally liable for the breach of, each and every provision of the Franchise Agreement, both monetary obligations and obligations to take or refrain from taking specific actions or to engage or refrain from engaging in specific activities, and is not released from any obligations to Bee Hive Homes by this Assignment. After the date of this Assignment, all references to Franchisee in the Franchise Agreement shall refer to both Assignor and Assignee both jointly and severally.
Source: Item 23 — RECEIPTS (FDD pages 34–123)
What This Means (2025 FDD)
According to Beehive Homes' 2025 Franchise Disclosure Document, the assignor is not released from their obligations to Beehive Homes under the Franchise Agreement after the assignment. The assignor remains personally bound by and liable for any breaches of the Franchise Agreement, including both monetary obligations and obligations to take or refrain from specific actions.
This means that even after an assignment, the original franchisee (assignor) continues to be responsible for ensuring that all terms and conditions of the Franchise Agreement are met. This provision protects Beehive Homes by ensuring that there is always a party responsible for the franchise's performance, even if the franchise is transferred to a new owner (assignee).
For a prospective franchisee, this clause highlights the importance of carefully selecting an assignee if they plan to sell their franchise in the future. The assignor's ongoing liability means they have a vested interest in the assignee's success and adherence to the Franchise Agreement. All references to the franchisee in the Franchise Agreement will refer to both the assignor and assignee jointly and severally.