Is a Beehive Homes franchisee considered an employee of the franchisor?
Beehive_Homes Franchise · 2025 FDDAnswer from 2025 FDD Document
XVII. RELATIONSHIP OF THE PARTIES
- 17.1. Independent Contractors. Franchisor and Franchisee have the relationship of owner and independent contractor and are not and shall not be considered as joint venturers, partners, employees, servants or agents of each other, and neither shall have the power to bind or obligate the other except as set forth in this Agreement. Franchisee shall conspicuously identify itself in all dealings with customers, suppliers, public officials, employees and others as the owner of the Home under a franchise granted by Franchisor and shall place such notices of independent ownership on such forms, business cards, stationery and advertising and other materials as Franchisor may require from time to time. Franchisee agrees to include in all agreements and contracts a statement that each "franchise is independently owned and operated."
- 17.2. No Liability for Acts of Other Party. Franchisee agrees not to employ any of the Names and Marks in signing any contract or applying for any license or permit, or in a manner that may result in Franchisor's liability for any of Franchisee's indebtedness or obligations, and that Franchisee will not use the Names and Marks in any way that has not been expressly authorized. Neither Franchisor nor Franchisee will make any express or implied agreements, warranties, guarantees or representations or incur any debt in the name or on behalf of the other, represent that their respective relationship is other than franchisor and franchisee or be obligated by or have any liability under any agreements or representations made by the other that are not expressly authorized in writing. Franchisor will be obligated for any damages to any person or property directly or indirectly arising out of the operation of the Home or the business Franchisee conducts pursuant to this Agreement.
- 17.3. Taxes. Neither Franchisor nor its Affiliates will have any liability for any sales, use, service, occupation, excise, gross receipts, income, property or other taxes, whether levied upon Franchisee or the Home, in connection with the business Franchisee conducts. Payment of all such taxes are Franchisee's sole responsibility.
Source: Item 23 — RECEIPTS (FDD pages 34–123)
What This Means (2025 FDD)
According to Beehive Homes' 2025 Franchise Disclosure Document, franchisees are explicitly considered independent contractors and not employees of the franchisor. Section 17.1 clearly states that the relationship between Beehive Homes and its franchisees is that of an owner and independent contractor. This means franchisees are not joint venturers, partners, employees, servants, or agents of Beehive Homes. As such, franchisees do not have the power to legally bind or obligate Beehive Homes, except as specifically outlined in the franchise agreement. This distinction is crucial for legal and tax purposes. Franchisees are responsible for their own business operations and are not subject to the same employment regulations as employees.
This independent contractor status has several implications for prospective Beehive Homes franchisees. Franchisees are responsible for their own business decisions, including hiring and managing their own employees. They must also conspicuously identify themselves as the owner of the Beehive Homes location under a franchise granted by the franchisor in all dealings with customers, suppliers, public officials, and employees. This includes placing notices of independent ownership on forms, business cards, stationery, and advertising materials as required by Beehive Homes. Furthermore, franchisees must include a statement in all agreements and contracts indicating that the franchise is independently owned and operated.
Beehive Homes franchisees are also responsible for all taxes related to their business, including sales, use, service, occupation, excise, gross receipts, income, and property taxes. Beehive Homes and its affiliates have no liability for these taxes. This further reinforces the independent nature of the franchisee's business. The franchisee's independent contractor status means they are responsible for their own business's debts, obligations, and any damages arising from the operation of the Beehive Homes location. This separation of liability is a standard practice in franchising, protecting the franchisor from the franchisee's business activities while granting the franchisee autonomy in running their business.