Does the Beehive Homes franchisee have to pay expert fees if they are non-compliant with the covenant?
Beehive_Homes Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) If Franchisee engages in such non-compliance or unauthorized and/or improper use of the System or the Names and Marks during or after the Term, Franchisor or any of its Affiliates, together with the successors and assigns of each, will be entitled to both temporary and permanent injunctive relief against Franchisee from any court of competent jurisdiction, in addition to all other remedies Franchisor or its Affiliates may have at law. Franchisee consents to the entry of such temporary and permanent injunctions. Franchisee must payall costs and expenses, including reasonable attorneys' fees, expert fees, costs and other expenses of litigation that Franchisor and/or its Affiliates may incur in connection with Franchisee's non-compliance with this covenant.
Source: Item 23 — RECEIPTS (FDD pages 34–123)
What This Means (2025 FDD)
According to Beehive Homes' 2025 Franchise Disclosure Document, if a franchisee fails to comply with the covenants related to the use of the brand's names and marks, they may be responsible for covering expert fees. Specifically, if the franchisee's non-compliance or unauthorized use of the Beehive Homes system or its names and marks leads to legal action, the franchisee is obligated to pay all associated costs and expenses. These expenses include reasonable attorney's fees, expert fees, and other litigation-related costs incurred by Beehive Homes or its affiliates. This obligation extends to any non-compliance during or after the term of the franchise agreement.
This requirement means that a Beehive Homes franchisee must ensure strict adherence to the franchise agreement's terms regarding the use of names and marks to avoid potential legal repercussions and financial burdens. The FDD emphasizes that any violation in this area is considered a material breach of the agreement, which can lead to significant financial liabilities for the franchisee. The franchisee's consent to temporary and permanent injunctions further underscores the seriousness of compliance with these covenants.
Many franchise agreements contain clauses that protect the brand's trademarks and system standards, and it is not unusual for franchisees to bear the costs of non-compliance. However, the inclusion of expert fees in addition to attorney's fees and other litigation expenses can substantially increase the financial risk for a franchisee who violates these terms. Therefore, prospective Beehive Homes franchisees should carefully review and understand the specific covenants related to the use of names and marks to ensure they can fully comply and avoid potential legal and financial consequences.