factual

What happens if a Beehive Homes franchisee attempts an Unauthorized Transfer?

Beehive_Homes Franchise · 2025 FDD

Answer from 2025 FDD Document

  • 13.5. Unauthorized Transfer. If Franchisee engages in an Unauthorized Transfer as provided in Section 13.2 or Section 13.6, Franchisee hereby covenants and promises to pay to Franchisor, in addition to all other costs and expenses provided for in this Agreement, an additional transfer fee in an amount equal to ten (10) times [5% times [12 times [the greater of (i) the average published monthly rate per resident of the Home during the 12 months preceding the Unauthorized Transfer, times the number of beds in the Home, or (ii) the average published monthly rate per resident of the home which has been in operation for the preceding 18 month and is in nearest geographic proximity to the Home , times the number of beds in the Home]]]. The parties hereto agree that this additional transfer fee is not a penalty, but the parties' best estimate of the anticipated damage to Franchisor resulting from the Unauthorized Transfer.

In addition to the foregoing, Franchisee or its Equity Owner(s) proposing the Unauthorized Transfer shall pay to Franchisor at the date of closing of the Transfer a commission equal to six percent (6%) of the gross transfer price if Franchisor or its Affiliate finds or introduces the proposed transferee to Franchisee or its Equity Owner(s)

Source: Item 23 — RECEIPTS (FDD pages 34–123)

What This Means (2025 FDD)

According to Beehive Homes' 2025 Franchise Disclosure Document, an Unauthorized Transfer occurs when a franchisee violates transfer restrictions outlined in the franchise agreement. If a Beehive Homes franchisee engages in an Unauthorized Transfer, the franchisee must pay Beehive Homes an additional transfer fee.

The additional transfer fee is calculated as ten times the product of 5%, 12, and the greater of two figures: (i) the average published monthly rate per resident of the Home during the 12 months preceding the Unauthorized Transfer, multiplied by the number of beds in the Home, or (ii) the average published monthly rate per resident of a comparable home which has been in operation for the preceding 18 months and is in nearest geographic proximity to the Home, multiplied by the number of beds in the Home.

In addition to this fee, the franchisee must also pay Beehive Homes a commission equal to six percent (6%) of the gross transfer price if Beehive Homes or its affiliate found or introduced the proposed transferee to the franchisee. Beehive Homes states that this additional transfer fee is not a penalty but is the parties' best estimate of the anticipated damage to Beehive Homes resulting from the Unauthorized Transfer.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.