Is a Beehive Homes franchisee required to execute a new franchise agreement upon renewal?
Beehive_Homes Franchise · 2025 FDDAnswer from 2025 FDD Document
- 5.3. Conditions to Renewal. Franchisee's renewal under Section 5.2 is subject to Franchisee's compliance with the following on the date of the notice of intent to renew and on the first day of the renewal Term: (i) Franchisee is not in default of any provision of this Agreement or any other Franchise Agreement or any other agreement with Franchisor or its Affiliates to which the Franchisee is a party; (ii) Franchisee is directly or indirectly the owner of the Home and will be for the renewal Term; (iii) Franchisee executes at least three (3) months prior to the first day of the renewal Term the then current form of Franchise Agreement being used by Franchisor, which Franchise Agreement may contain materially different terms from those contained in this Agreement; and (iv) Franchisee, its Home, equipment and procedures meet the current Standards applicable to new franchisees.
Source: Item 23 — RECEIPTS (FDD pages 34–123)
What This Means (2025 FDD)
According to Beehive Homes' 2025 Franchise Disclosure Document, a franchisee is required to execute the then-current form of the Franchise Agreement as a condition of renewal. This new agreement must be executed at least three months before the start of the renewal term. The FDD specifies that the new Franchise Agreement may contain terms that are materially different from the original agreement.
This requirement means that franchisees need to be prepared to accept potentially significant changes to the terms of their franchise agreement upon renewal. These changes could affect various aspects of the franchise operation, including fees, standards, and operational requirements. It is important for franchisees to carefully review the new agreement and understand the implications of any changes.
While Beehive Homes does not charge a renewal fee, the potential for materially different terms in the renewed agreement introduces a degree of uncertainty and risk for franchisees. This contrasts with some franchise systems that offer renewals under substantially the same terms, providing more predictability for franchisees. Prospective franchisees should consider this factor and seek legal counsel to fully understand the potential impact of this renewal condition.