For Beehive Homes, besides the franchisee, which other individuals are bound by the non-competition agreement if the franchisee is a corporation?
Beehive_Homes Franchise · 2025 FDDAnswer from 2025 FDD Document
- 8.7. Conflict of Interest. Franchisee covenants that for the duration of this Agreement: (a) neither it nor any Equity Owner shall be employed by or have any direct or indirect financial or ownership interest in any other business providing services of the type described in this Agreement or in the Manual unless such other business is operated pursuant to a franchise granted by Franchisor or its Affiliates; and (b) it will require its resident manager and all employees to execute Franchisor's standard Non-Competition and Non-Disclosure Agreement, signed copies of which will be forwarded by Franchisee to Franchisor within one (1) week after execution or upon the date of employment, whichever is sooner.
Source: Item 23 — RECEIPTS (FDD pages 34–123)
What This Means (2025 FDD)
According to Beehive Homes' 2025 Franchise Disclosure Document, if the franchisee is a corporation, any Equity Owner is also bound by the non-competition agreement. Specifically, neither the franchisee nor any Equity Owner can be employed by or have any direct or indirect financial or ownership interest in any other business providing similar services, unless that business is also a Beehive Homes franchise. An Equity Owner is anyone with a financial stake in the franchise.
Additionally, Beehive Homes requires the franchisee to ensure that its resident manager and all employees sign Beehive Homes' standard Non-Competition and Non-Disclosure Agreement. The franchisee must then forward signed copies of these agreements to Beehive Homes within one week of execution or upon the date of employment, whichever comes first. This ensures that not only the franchisee and equity owners but also the key personnel involved in the daily operations of the Beehive Homes business are bound by non-competition and non-disclosure obligations.
This is a fairly standard practice in franchising, as franchisors want to protect their business model and trade secrets. The non-compete agreement prevents individuals with knowledge of Beehive Homes' operational methods from using that knowledge to benefit a competing business. Prospective franchisees should carefully review the terms of the Non-Competition and Non-Disclosure Agreement to understand the specific restrictions and their duration, as well as the definition of Equity Owner.