What is the Beehive Homes franchisor's obligation to provide notice of default before terminating the agreement?
Beehive_Homes Franchise · 2025 FDDAnswer from 2025 FDD Document
- 14.2.
Notice of Default.
Upon the occurrence of an Event of Default as defined in Section 14.1 above, Franchisor shall give Franchisee written Notice of Default which must be cured by Franchisee as of the date of the Notice if the Event of Default is one which is incapable of cure by Franchisee or within thirty (30) days after the date of the Notice, unless a longer period is required under the laws of the state in which the Home is located.
In addition, for an Event of Default under Section 14.1(a), Franchisor may also give written notice to any lender of Franchisee.
- 14.3.
Termination.
Upon the occurrence of any Event of Default and compliance with the notice requirements of Section 14.2 and upon Franchisee's failure to timely cure, Franchisor may terminate this Agreement by delivering to Franchisee a written Notice of Termination.
This Agreement shall not be terminated until the delivery of the Notice of Termination to Franchisee.
Source: Item 23 — RECEIPTS (FDD pages 34–123)
What This Means (2025 FDD)
According to Beehive Homes' 2025 Franchise Disclosure Document, before terminating the franchise agreement, Beehive Homes must provide the franchisee with written notice of default. If the default is something that the franchisee cannot fix, the notice is effective immediately. However, if the event of default is curable, the franchisee typically has thirty days from the date of the notice to correct the issue, unless state law requires a longer period.
Beehive Homes may also provide written notice of default to any lender of the franchisee if the default involves failure to pay monies owed to Beehive Homes. After providing notice of default, Beehive Homes can terminate the agreement if the franchisee fails to correct the default within the specified time frame by delivering a written Notice of Termination. The franchise agreement is not terminated until the Notice of Termination is delivered to the franchisee.
These notice and cure provisions are typical in franchising, as they provide an opportunity for franchisees to rectify any issues before the franchisor takes the drastic step of terminating the agreement. This can help to preserve the franchise relationship and avoid costly legal disputes. However, the specific events that constitute a default and the time frame for curing the default can vary significantly from franchise to franchise, so it is important for prospective franchisees to carefully review the default and termination provisions in the franchise agreement.