What happens if the Beehive Homes home has not been in operation for 18 months?
Beehive_Homes Franchise · 2025 FDDAnswer from 2025 FDD Document
- 14.6. Franchisor's Alternative Right Upon Event of Default or Expiration. As additional consideration for this Agreement, Franchisee hereby covenants and agrees to pay to Franchisor and its designees, exercisable upon the occurrence of an Event of Default described in Section 14.1 above, and subject to the notice requirements of Section 14.2 above, or upon the occurrence of an Election Not to Renew as defined in Section 5.2 of this Agreement, or upon expiration of this Agreement, in addition to all other costs and expenses provided for in this Agreement and in lieu of Section 14.5 above, 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 Event of Default, 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 months 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 Event of Default or Election Not to Renew or expiration.
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, or if the franchisee elects not to renew the agreement, or upon the agreement's expiration, Beehive Homes has the right to collect an additional transfer fee. This fee is calculated as ten times the result of 5% multiplied by 12, then multiplied by the greater of two figures.
The first figure is the average published monthly rate per resident of the Beehive Homes location during the 12 months preceding the Event of Default, multiplied by the number of beds in the Home. The second figure is the average published monthly rate per resident of a Beehive Homes location that 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.
Thus, if the Beehive Homes location has not been in operation for 18 months, the calculation will use the average monthly rate of a geographically proximate Beehive Homes location that has been in operation for at least 18 months. This ensures that even a newer location's transfer fee is based on established market rates, protecting Beehive Homes' interests. The FDD states that this additional transfer fee is not a penalty, but the parties' best estimate of the anticipated damage to Beehive Homes resulting from the Event of Default or Election Not to Renew or expiration.