What expenses does the Beehive Homes nonrefundable transfer fee reimburse?
Beehive_Homes Franchise · 2025 FDDAnswer from 2025 FDD Document
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The Company derives revenue from nonrefundable transfer fees, which are charged to existing franchisees when they want to transfer their franchise license to another franchisee. The nonrefundable transfer fee is reimbursement to the Company for legal, accounting, credit, and investigation expenses incurred in support of facilitating the transfer. These fees are earned and recognized at the time of the transfer.
Franchise revenues consist of the following:
| 159. | Dennis McGraw 409 South 300 West, Santaquin, Utah 84653 | 801-360-4118 |
|---|---|---|
| 160. | Michelle Ketcher 3430 West 11400 South, South Jordan, Utah 84655 | 801-860-4943 |
| 161. | Dennis McGraw 858 East 100 South, Spanish Fork, Utah 84660 | 801-360-4118 |
Note C – Long-Term Debt
Long-term debt consisted of the following at December 31:
| 163.
Source: Item 23 — RECEIPTS (FDD pages 34–123)
What This Means (2025 FDD)
According to Beehive Homes' 2025 Franchise Disclosure Document, the nonrefundable transfer fee is charged to existing franchisees when they transfer their franchise license to another franchisee. This fee serves as reimbursement to Beehive Homes for expenses incurred during the transfer process. Specifically, the $15,000 nonrefundable transfer fee covers the company's reasonable legal, accounting, credit, and investigation expenses related to facilitating the transfer. These fees are considered earned and are recognized by Beehive Homes at the time the transfer is completed.
For a prospective Beehive Homes franchisee, this means that if they decide to sell their franchise to another party, they will be responsible for paying this $15,000 transfer fee. It is important to note that this fee is nonrefundable, regardless of whether the transfer is ultimately completed. The fee is intended to compensate Beehive Homes for the costs they incur in reviewing and processing the transfer application, which includes legal and accounting work, assessing the creditworthiness of the proposed transferee, and conducting investigations to ensure the transferee meets the franchisor's standards.
This type of transfer fee is common in franchising, as franchisors typically want to ensure that any new franchisee meets their qualifications and that the transfer process is handled properly to protect the brand and the interests of other franchisees. The amount of the fee can vary depending on the complexity of the transfer and the specific costs incurred by the franchisor. Franchisees should factor this potential cost into their financial planning when considering the purchase of a franchise, as it can impact their overall return on investment if they later decide to sell their business.