Where must disputes with Beehive Homes be resolved?
Beehive_Homes Franchise · 2025 FDDAnswer from 2025 FDD Document
| PROVISION | FRANCHISE AGREEMENT SECTION | SUMMARY |
|---|---|---|
| a. Length of the franchise | Section 5.1 | ten years |
| term | ||
| b. Renewal or extension of | Section 5.2 | additional ten year renewal periods if you |
| the term | are in good standing | |
| c. Requirements for franchisees to renew or extend | Section 5 | three to nine month advance notice, approval by US, and signing by YOU of the current form of franchise agreement, which may have materially different terms and conditions from your initial franchise agreement |
| d. Termination by YOU | Not Applicable | Not Applicable |
| e. Termination by US without | Not Applicable | Not Applicable |
| cause | ||
| f. Termination by US with cause | Section 14 | WE can terminate if YOU commit certain events of default or other breaches of the Franchise Agreement |
| g. "Cause" defined - curable defaults | Section 14.1 | YOU have 30 days to cure: nonpayment of fees, nonperformance of franchise agreement where performance can be completed |
| h. “Cause” defined - non- curable defaults | Section 14.1 | non-curable defaults: bankruptcy (may not be enforceable under federal bankruptcy law), unauthorized transfers, abandonment, trademark misuse |
| i. YOUR obligations on termination/nonrenewal | Section 14.4; 14.5; 14.6 & 14.7 | pay amounts due; sell Home to Franchisor |
| j. Assignment of contract by | Section 13.1 | Assignee reasonably willing and able to |
| US | perform | |
| k. "Transfer" by YOU - | Section 2.20; | includes transfer of contract or assets and |
| defined | 13.2 | change in ownership |
| l. OUR approval of transfer | Section 13.4 | prior written approval but not |
| by YOU | unreasonably withheld | |
| m. Conditions for OUR | Section 13.4 | payment of fees, new franchise |
| approval of transfer | agreement, training | |
| n. OUR right of first refusal | Section 13.6 | WE can match any offer |
| to acquire YOUR business | ||
| o. OUR option to purchase YOUR business | Section 14.5 | WE can purchase YOUR business for the initial cost of the real property and the book value of the personal property upon an Event of Default |
| p. YOUR death or disability | Section 13.3 | transfer must generally be approved within 6 months. Please refer to the state cover page, if any, accompanying this Franchise Disclosure Document for any special provisions applicable to YOUR state |
| q. Non-competition | Section 12.1 | no involvement in competing business |
| covenants during the term of | ||
| the franchise | ||
| r. Non-competition covenants after the franchise is terminated or expires | Section 12.1 | no involvement in competing business for three years. Please refer to the state cover page, if any, accompanying this Franchise Disclosure Document for any special provisions applicable to YOUR state. |
| s. Modification of the | Section 18.14 | only in writing |
| agreement | ||
| t. Integration/merger clause | Section 18.14 | Only the terms of the franchise agreement are binding. Any representations or promises outside of the disclosure document and franchise agreement may not be enforceable. Notwithstanding the foregoing, no provision in any franchise agreement is intended to disclaim the express representations made in this Franchise Disclosure Document. |
| u. Dispute resolution by | Section 16 | all disputes must be arbitrated in Utah |
| arbitration or mediation | ||
| v. Choice of forum | Section 18.2 | litigation generally must be in Utah. Please refer to the state cover page, if any, accompanying this Franchise Disclosure Document for any special provisions applicable to YOUR state (subject to applicable state law). |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP (FDD pages 25–27)
What This Means (2025 FDD)
According to Beehive Homes' 2025 Franchise Disclosure Document, disputes must be resolved through arbitration in Utah. Specifically, Section 16 of the franchise agreement mandates that all disputes undergo arbitration. Additionally, Section 18.2 states that litigation generally must occur in Utah. However, the FDD also advises prospective franchisees to refer to the state cover page for any special provisions applicable to their state, as this may affect the choice of forum, subject to applicable state law.
This means that if a franchisee has a disagreement with Beehive Homes, they will likely need to travel to Utah to resolve it through arbitration or litigation. Arbitration is a form of alternative dispute resolution where a neutral third party hears both sides of the argument and makes a decision. This decision is often binding, meaning that both parties must abide by it. Litigation involves taking the dispute to court, which can be a more expensive and time-consuming process than arbitration.
The requirement to arbitrate or litigate in Utah could pose a significant burden for franchisees located far from Utah. It could increase the cost of resolving disputes due to travel expenses, legal fees, and the inconvenience of being away from their business and home. Franchisees should consider this factor carefully before investing in a Beehive Homes franchise.
It is common for franchise agreements to specify a particular location for dispute resolution, often the franchisor's home state. This provision tends to favor the franchisor, who is already established in that location. Prospective franchisees should consult with an attorney to understand the implications of these clauses and to assess their potential impact on their business.