For a Beehive Homes franchise, what is the consequence of failing to remedy all defaults before a transfer?

According to the 2025 Beehive Homes Franchise Disclosure Document, a franchisee proposing a transfer must remedy all defaults under the Franchise Agreement and any other agreements with Beehive Homes or its affiliates. They must also pay all amounts due to Beehive Homes and its affiliates through the date of closing the transfer. Additionally, the franchisee must resolve to Beehive Homes' satisfaction, or provide adequate security for, any pending or threatened suits, actions, or proceedings against Beehive Homes or its affiliates that could result in liability for them. Finally, the franchisee must execute Beehive Homes' current form of voluntary termination agreement, which may include a general release covering the termination of the agreement.

In practical terms, this means that if a Beehive Homes franchisee wants to sell their franchise, they cannot have any outstanding financial obligations to Beehive Homes, nor can they be in violation of any terms of the franchise agreement. This includes issues such as unpaid royalties, failure to maintain standards, or any other breach of contract. All these issues must be resolved before the transfer can proceed.

This requirement protects Beehive Homes by ensuring that the new franchisee starts with a clean slate and that any existing problems are resolved before the transfer is completed. It also ensures that Beehive Homes receives all outstanding payments and is protected from any potential liabilities arising from the previous franchisee's actions. For a prospective franchisee, this highlights the importance of maintaining good standing with Beehive Homes and adhering to all terms of the franchise agreement to facilitate a smooth transfer process if they decide to sell in the future.