For a Beehive Homes franchise, what is the effect of a transfer that does not comply with Section 13.4?
Beehive_Homes Franchise · 2025 FDDAnswer from 2025 FDD Document
- 13.5. Unauthorized Transfer. If Franchisee engages in an Unauthorized Transfer as provided in Section 13.2 or Section 13.6, Franchisee hereby covenants and promises to pay to Franchisor, in addition to all other costs and expenses provided for in this Agreement, an additional transfer fee in an amount equal to ten (10) times [5% times [12 times [the greater of (i) the average published monthly rate per resident of the Home during the 12 months preceding the Unauthorized Transfer, times the number of beds in the Home, or (ii) the average published monthly rate per resident of the home which has been in operation for the preceding 18 month and is in nearest geographic proximity to the Home , times the number of beds in the Home]]]. The parties hereto agree that this additional transfer fee is not a penalty, but the parties' best estimate of the anticipated damage to Franchisor resulting from the Unauthorized Transfer.
Source: Item 23 — RECEIPTS (FDD pages 34–123)
What This Means (2025 FDD)
According to Beehive Homes' 2025 Franchise Disclosure Document, any transfer that does not comply with the outlined terms is considered an unauthorized transfer. If a franchisee engages in an unauthorized transfer as described in Section 13.2 or Section 13.6, the franchisee must pay Beehive Homes an additional transfer fee.
The additional transfer fee is calculated as ten times the result of 5% multiplied by 12 times the greater of two figures: (i) the average published monthly rate per resident of the Beehive Homes location during the 12 months before the unauthorized transfer, multiplied by the number of beds in the home, or (ii) the average published monthly rate per resident of a Beehive Homes location that has been in operation for the preceding 18 months and is in nearest geographic proximity to the Home, multiplied by the number of beds in the home.
Beehive Homes states that this additional transfer fee is not a penalty but rather the parties' best estimate of the anticipated damage to Beehive Homes resulting from the unauthorized transfer. This highlights the importance of adhering to the outlined transfer procedures to avoid significant financial implications.