Must a Beehive Homes franchisee pay all amounts due to the franchisor before transferring?
Beehive_Homes Franchise · 2025 FDDAnswer from 2025 FDD Document
its Equity Owner(s);
- (c) Franchisee or its Equity Owner(s) proposing the Transfer shall remedy all defaults under this Agreement and all other agreements they may have with Franchisor or its Affiliates; shall pay all amounts due to Franchisor and its Affiliates through the date of closing of the Transfer; shall conclude to Franchisor's satisfaction, or provide adequate security for, any suit, action, or proceeding pending or threatened against Franchisor or its Affiliates, which may result in any liability on the part of Franchisor or its Affiliates;
Source: Item 23 — RECEIPTS (FDD pages 34–123)
What This Means (2025 FDD)
According to Beehive Homes' 2025 Franchise Disclosure Document, a franchisee proposing a transfer must pay all amounts owed to Beehive Homes and its affiliates before the transfer can be completed. Specifically, the franchisee must remedy all defaults under the franchise agreement and any other agreements with Beehive Homes or its affiliates. They must also resolve any pending or threatened legal actions against Beehive Homes or its affiliates to the franchisor's satisfaction, or provide adequate security.
In addition to settling outstanding financial obligations and legal matters, the franchisee must also execute Beehive Homes' current form of voluntary termination agreement, which may include a general release. This ensures a clean break between the transferring franchisee and the franchisor, protecting Beehive Homes from future liabilities related to the franchisee's past operations.
These requirements are standard practice in franchising, as franchisors need to ensure that transferring franchisees leave in good standing to protect the brand's reputation and financial interests. By requiring the resolution of all outstanding issues, Beehive Homes maintains control over who joins and exits the franchise system, safeguarding the network's overall health and stability.