For a Beehive Homes franchise, who can be the beneficiaries of a grantor trust to which an equity interest is transferred?
Beehive_Homes Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee or, if Franchisee is a corporation or other legal entity its Equity Owner(s), may Transfer an Equity Interest to a grantor trust (a defined in the Internal Revenue Code of 1986, as amended) provided the transferor or the transferor and the transferor's spouse are the sole trustees of the grantor trust and the transferor and transferor's Immediate Family Members are the sole beneficiaries of the grantor trust.
Source: Item 23 — RECEIPTS (FDD pages 34–123)
What This Means (2025 FDD)
According to Beehive Homes' 2025 Franchise Disclosure Document, a franchisee or equity owner may transfer an equity interest to a grantor trust, as defined in the Internal Revenue Code of 1986. However, there are specific conditions regarding who can benefit from this trust.
The transferor, or the transferor and their spouse, must be the sole trustees of the grantor trust. Furthermore, the beneficiaries of the grantor trust must be limited to the transferor and the transferor's immediate family members. This means that only the franchisee, their spouse (if applicable), and their immediate family can be beneficiaries of the trust to which the equity interest is transferred.
This provision ensures that control and benefit of the Beehive Homes franchise remain within the franchisee's family unit, aligning with the franchisor's interest in maintaining a consistent and reliable ownership structure. A prospective franchisee should carefully consider these limitations when planning their estate or structuring their business ownership.