What constitutes 'good cause' for Beehive Homes to terminate a franchise agreement?

According to Beehive Homes' 2025 Franchise Disclosure Document, one event that constitutes default, potentially leading to termination, is when the franchisee commits any act which constitutes good cause for termination as determined under the law of the state in which the Home is located. This means that the definition of 'good cause' is not uniformly defined by Beehive Homes itself, but rather is determined by the specific laws of the state where the franchise is operating. This could include violations of state regulations, failure to meet specific care standards, or other actions that the state deems sufficient grounds for termination.

This clause places the onus on the franchisee to understand and comply with the specific laws of their state regarding what constitutes 'good cause' for termination. It also means that the grounds for termination can vary significantly depending on the state in which the Beehive Homes franchise operates. A prospective franchisee should research and understand the specific laws in their state that could lead to a 'good cause' termination.

It is important to note that this is only one of several events of default listed in the FDD. Other events of default include failure to make payments, failure to perform obligations under the agreement, low occupancy rates, bankruptcy, actions impairing goodwill, unauthorized transfers, and defaults under other agreements with Beehive Homes. While the FDD specifies several events that constitute default, the definition of 'good cause' is left to the interpretation of state law, which introduces a degree of uncertainty for the franchisee.

Prospective franchisees should consult with a legal professional to fully understand the implications of this clause and how it might affect their franchise agreement. They should also seek clarification from Beehive Homes regarding any specific concerns or questions they have about what actions could be considered 'good cause' for termination in their state.