What is the Beehive Homes franchisee's obligation to pay the cancellation fee after an Event of Default?
Beehive_Homes Franchise · 2025 FDDAnswer from 2025 FDD Document
nation or Expiration. Upon occurrence of an Event of Default, termination, Election Not to Renew or expiration of this Agreement for any reason, the Franchisee shall cease to be a licensed franchisee of Franchisor and Franchisee hereby covenants:
- (a) To pay to Franchisor all fees and other charges owed or accrued to Franchisor on or before the first day of the month following the date of termination or expiration;
- (b) To pay to Franchisor a cancellation fee in the amount of Ten Thousand
Source: Item 23 — RECEIPTS (FDD pages 34–123)
What This Means (2025 FDD)
According to Beehive Homes' 2025 Franchise Disclosure Document, if an Event of Default occurs and the franchise agreement is terminated, the franchisee is obligated to pay a cancellation fee. Specifically, the franchisee must pay Beehive Homes a cancellation fee of $10,000. This fee is in addition to any other outstanding fees or charges owed to Beehive Homes up to the termination date.
An Event of Default can occur if the franchisee fails to make payments when due, fails to perform their obligations under the franchise agreement, or if the occupancy of the Beehive Homes location falls below 50% for 30 or more consecutive days after previously exceeding that occupancy rate. Other events, such as bankruptcy, actions that impair the goodwill of Beehive Homes, or engaging in an unauthorized transfer, can also trigger an Event of Default.
This requirement to pay a $10,000 cancellation fee upon termination following an Event of Default represents a significant financial obligation for the franchisee. It is crucial for prospective franchisees to understand the conditions that constitute an Event of Default and the potential financial consequences, including this cancellation fee, should the agreement be terminated. Franchisees should also be aware of the notice and cure periods provided by Beehive Homes, allowing an opportunity to remedy the default before termination occurs.