What is the definition of 'Event of Default' in the Beehive Homes Franchise Agreement?
Beehive_Homes Franchise · 2025 FDDAnswer from 2025 FDD Document
- 14.1. Events of Default. The following, subject to the notice requirements of Section 14.2 below, shall constitute "Events of Default":
- (a) Any monies payable by Franchisee to Franchisor shall not be paid as and when due and payable;
- (b) There shall be any failure or omission in the full and faithful performance and observance of any of the terms, conditions and limitations of this Agreement on Franchisee's part to be performed or observed (other than the payment of monies);
- (c) The occupancy of Franchisee's Home shall be less than 50% for thirty (30) or more consecutive days after once having attained an occupancy of greater than 50%;
- (d) There shall be filed by or against Franchisee, in any court pursuant to any statute, either of the United States or any state, a petition for any relief under the Federal Bankruptcy Act or for reorganization or for the appointment of a receiver or trustee for the
property of Franchisee, which is not vacated within a period of twenty (20) days, or Franchisee shall be adjudicated bankrupt or insolvent within the meaning of insolvency in either Bankruptcy Act proceedings or equity proceedings, or shall make a general assignment for the benefit of creditors, or, admit in writing its inability to pay its debts as they mature, or, as debtor, take the benefit of the provisions of any debtor relief act, whether now or hereafter enacted;
(e) Franchisee by its action or inaction, effects an incident which mayreasonably be expected to materially impair the goodwill associated with the Names and Marks;
(f) Franchisee commits any act which constitutes good cause for termination as determined under the law of the state in which the Home is located;
(g) Franchisee shall engage in any Unauthorized Transfer as provided in Section 13.5 of this Agreement; or
(h) The occurrence of an Event of Default under any other Franchise Agreement or other agreement between the Franchisee or any Affiliate of the Franchisee, on the one hand, and Franchisor or any of its Affiliates, on the other hand.
Source: Item 23 — RECEIPTS (FDD pages 34–123)
What This Means (2025 FDD)
According to Beehive Homes' 2025 Franchise Disclosure Document, an 'Event of Default' is defined within Section 14.1 of the franchise agreement. These events trigger certain actions and potential termination of the agreement if not properly addressed.
Specifically, an Event of Default includes failing to make payments to Beehive Homes when due, any failure to perform obligations outlined in the agreement (excluding monetary payments), and if the occupancy of the Beehive Homes location falls below 50% for 30 or more consecutive days after initially exceeding 50% occupancy. Legal and financial issues such as bankruptcy filings against the franchisee that are not resolved within 20 days, or the franchisee admitting inability to pay debts, also constitute Events of Default.
Furthermore, actions or inactions by the franchisee that could reasonably harm the goodwill associated with the Beehive Homes brand, any act that constitutes grounds for termination under state law where the home is located, engaging in unauthorized transfers of the franchise, or the occurrence of a default under any other agreement between the franchisee (or their affiliates) and Beehive Homes (or its affiliates) are also considered Events of Default.
Prospective franchisees should carefully review Section 14.1 of the Beehive Homes Franchise Agreement to fully understand what actions or omissions could lead to a declaration of default and the subsequent consequences. Understanding these triggers is crucial for maintaining compliance and avoiding potential termination of the franchise agreement.