When is the franchise royalty for Beehive Homes franchises considered to have commenced?
Beehive_Homes Franchise · 2025 FDDAnswer from 2025 FDD Document
eding calendar month. The Franchise Royalty will commence on the earlier of (i) the first day of the first full calendar month following the date on which the Home reaches a 50% occupancy; or (ii) the first day of the sixth full calendar month following the date of opening of the Home. For purposes of determining the Franchise Royalty, "Gross Revenues" is defined to be the gross receipts of every kind and nature whatsoever received by Franchisee directly or indirectly in connection with the operation of the franchised business, the Home and/or providing of services, excepting only the amount of sales or use taxes levied upon the sale of goods or services by a governmental taxing authority and actually paid to said taxing authority.
- 4.4. Determination and Method of Payment of Franchise Royalty. The calculation and payment of the Franchise Royalty specified in Section 4.3 above shall be made as follows:
- (a) On or before the 10th day of each calendar month Franchisee shall provide to Franchisor a report the financial activity of the Home for the immediately preceding calendar month to Franchisor. The report shall show Gross Revenues, all monies received or accrued, all sales or other services performed, and such other information concerning the financial affairs of Franchisee as Franchisor may reasonably require. For purposes of this Agreement, such information shall be referred to as the "Monthly Revenues Report."
- (b) The Franchise Royalty shall be due and payable on the same date that the corresponding Monthly Revenues Report is due, and shall be paid concurrently with the submission of the corresponding Monthly Revenues Report.
- (c) If the Franchisee fails to deliver the required Monthly Revenues Reports to Franchisor on or before the 10th day of each month, a late charge of $100.00 shall be assessed for each Monthly Revenues Report which is not timely filed.
- (d) If the Franchisee fails to pay any Franchise Royalty when due, Franchisee shall be assessed a one-time late charge equal to the lesser of ten percent (10%) of the Franchise Royalty due or, if less, the maximum late charge assessable under the laws of the state in whic
Source: Item 23 — RECEIPTS (FDD pages 34–123)
What This Means (2025 FDD)
According to Beehive Homes' 2025 Franchise Disclosure Document, the franchise royalty, which is 5% of gross revenues, commences on the earlier of two conditions. The first condition is the first day of the first full calendar month following the date on which the Beehive Homes location reaches 50% occupancy. The second condition is the first day of the sixth full calendar month following the date of opening of the Home.
This means that a new Beehive Homes franchisee will not immediately be required to pay the 5% royalty on gross revenues. The royalty payments are deferred until either the business reaches a significant level of operation (50% occupancy) or a grace period of six months has passed since the opening of the location. This provides some financial relief to the franchisee during the initial ramp-up phase of the business.
Beehive Homes requires franchisees to pay the franchise royalty monthly, specifically on or before the 10th day of each calendar month. This payment is based on the gross revenues from the preceding calendar month. Franchisees must also submit a Monthly Revenues Report to Beehive Homes detailing the financial activity of the home for the previous month. This report should include gross revenues, all monies received or accrued, all sales or other services performed, and any other financial information that Beehive Homes may reasonably require. Failure to submit the Monthly Revenues Report on time results in a late charge of $100 for each late report. Additionally, failure to pay any franchise royalty when due will result in a one-time late charge equal to the lesser of 10% of the royalty due or the maximum late charge assessable under the laws of the state in which the Home is located.