Does the Beehive Homes FDD specify the exact terms generally available to other franchisees for renewal?
Beehive_Homes Franchise · 2025 FDDAnswer from 2025 FDD Document
- 5.2. Renewal Terms. Subject to the terms and conditions set forth in Section 5.3 below, Franchisee may renew its franchise upon the expiration of the initial Term or any renewal Term for additional consecutive ten (10) year Terms by giving Franchisor written notice of intent to renew at least six (6) months but not more than nine (9) months prior to the expiration date of the then current Term. Failure of the Franchisee to give such notice shall constitute an Election Not to Renew, unless the law of the state in which the Home is located provides otherwise. The Franchisee shall not be required to pay any renewal fee or additional franchise fee in connection with any renewal hereunder.
- 5.3. Conditions to Renewal. Franchisee's renewal under Section 5.2 is subject to Franchisee's compliance with the following on the date of the notice of intent to renew and on the first day of the renewal Term: (i) Franchisee is not in default of any provision of this Agreement or any other Franchise Agreement or any other agreement with Franchisor or its Affiliates to which the Franchisee is a party; (ii) Franchisee is directly or indirectly the owner of the Home and will be for the renewal Term; (iii) Franchisee executes at least three (3) months prior to the first day of the renewal Term the then current form of Franchise Agreement being used by Franchisor, which Franchise Agreement may contain materially different terms from those contained in this Agreement; and (iv) Franchisee, its Home, equipment and procedures meet the current Standards applicable to new franchisees.
Source: Item 23 — RECEIPTS (FDD pages 34–123)
What This Means (2025 FDD)
According to Beehive Homes' 2025 Franchise Disclosure Document, a franchisee can renew their franchise for additional ten-year terms if they meet certain conditions. To renew, the franchisee must provide written notice of their intent to renew to Beehive Homes at least six months, but no more than nine months, before the current term expires. The franchisee is not required to pay a renewal fee or additional franchise fee.
However, renewal is contingent upon the franchisee meeting specific conditions both at the time of the renewal notice and on the first day of the new term. These conditions include not being in default of any agreements with Beehive Homes or its affiliates, owning the Home directly or indirectly, and ensuring the Home, equipment, and procedures meet the standards applicable to new franchisees.
Most importantly, the franchisee must execute the then-current form of the Franchise Agreement at least three months before the renewal term begins. This new agreement may contain terms that are materially different from the original agreement. This means that while a franchisee has the option to renew, the terms of the renewal agreement could be significantly different, potentially impacting their obligations and the overall financial viability of the franchise. This is a notable risk for prospective franchisees as the renewal terms are not guaranteed to be the same or better than the original agreement.