What is the dependency between the franchise agreement and the payment of the initial franchise fee for Beehive Homes?
Beehive_Homes Franchise · 2025 FDDAnswer from 2025 FDD Document
AND FRANCHISE ROYALTY
- 4.1. Initial Franchise Fee. Franchisee hereby promises and agrees to pay to Franchisor an initial franchise fee (the "Initial Franchise Fee") of Seventy-Five Thousand Dollars ($75,000.00), payable one-third upon signing of this Agreement and the balance in full upon the earlier to occur of the following: (i) the funding of any construction loan for the Home; or (ii) the issuance of a building permit for the Home. The Initial Franchise Fee is fully earned and nonrefundable as and when paid as consideration for the expenses incurred by Franchisor in furnishing assistance and service to Franchisee and for Franchisor's lost or deferred opportunity to franchise to others. If the Franchise Fee is not paid in full on or before the date which is one year after the Effective Date of this Agreement, Franchisor may, in its sole discretion, terminate this Agreement, and no fees will be refunded to Franchisee.
- 4.2. Initial Franchise Fee for Additional Franchises. Franchisees in good standing and all of whose franchised Homes are open and operating may acquire additional franchises by paying the then current franchise fee for each additional franchise offered by Franchisor, subject to approval by the Franchisor. The current franchise fee for each additional franchise is Fifty Thousand Dollars ($50,000.00), payable in full upon the execution of a franchise agreement for the additional franchise and is fully earned and nonrefundable upon payment. This current fr
Source: Item 23 — RECEIPTS (FDD pages 34–123)
What This Means (2025 FDD)
According to Beehive Homes's 2025 Franchise Disclosure Document, the franchise agreement is directly linked to the payment of the initial franchise fee. The franchisee agrees to pay Beehive Homes an initial franchise fee of $75,000. One-third of this fee is due upon signing the franchise agreement. The remaining balance is due upon the earlier of either the funding of any construction loan for the home or the issuance of a building permit for the home.
Beehive Homes considers the initial franchise fee fully earned and nonrefundable once paid. This acknowledges the expenses Beehive Homes incurs to assist the franchisee, as well as the opportunity cost for Beehive Homes in terms of potentially franchising to someone else.
If the franchisee fails to pay the initial franchise fee in full within one year of the agreement's effective date, Beehive Homes reserves the right to terminate the agreement. In the event of termination due to non-payment, the franchisee will not receive a refund of any fees already paid. For franchisees in good standing who wish to acquire additional franchises, the initial franchise fee is $50,000, payable upon the execution of the franchise agreement for the additional franchise. This fee is also fully earned and nonrefundable upon payment.