What are the Beehive Homes franchisee's obligations upon the occurrence of 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 Dollars ($10,000.00);
- (c) Not to hold itself out as a franchisee of Franchisor and to cease all use of the Names and Marks, Trade Secrets and Copyrighted Materials;
- (d) To deliver and surrender up to Franchisor each and all of the Names and Marks, and any physical objects bearing or containing any of the Names and Marks, or, at
Franchisor's election, to obliterate or destroy any Names and Marks in Fr
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, the franchisee must cease operating as a licensed Beehive Homes franchisee. Specifically, the franchisee must pay all outstanding fees and charges owed to Beehive Homes by the first day of the month following the termination or expiration of the agreement. Additionally, the franchisee is obligated to pay a cancellation fee of $10,000.00.
Furthermore, the franchisee must immediately stop representing themselves as a Beehive Homes franchisee and discontinue all use of the Beehive Homes' names, marks, trade secrets, and copyrighted materials. The franchisee is also required to hand over to Beehive Homes all items bearing the company's names and marks. Alternatively, at Beehive Homes' discretion, the franchisee may be required to destroy or remove any of these names and marks from their possession.
These obligations are significant for a prospective Beehive Homes franchisee as they highlight the financial and operational consequences of defaulting on the franchise agreement. The $10,000 cancellation fee, in addition to any outstanding fees, could represent a substantial financial burden. The immediate cessation of operations and brand usage could also create challenges for the franchisee in transitioning to a new business or selling the location. It is important for potential franchisees to fully understand the conditions that constitute an Event of Default and to have a plan in place to address potential financial or operational difficulties.