What happens to the Beehive Homes location if the franchise is terminated?
Beehive_Homes Franchise · 2025 FDDAnswer from 2025 FDD Document
| PROVISION | FRANCHISE AGREEMENT SECTION | SUMMARY |
|---|---|---|
| a. Length of the franchise | Section 5.1 | ten years |
| term | ||
| b. Renewal or extension of | Section 5.2 | additional ten year renewal periods if you |
| the term | are in good standing | |
| c. Requirements for franchisees to renew or extend | Section 5 | three to nine month advance notice, approval by US, and signing by YOU of the current form of franchise agreement, which may have materially different terms and conditions from your initial franchise agreement |
| d. Termination by YOU | Not Applicable | Not Applicable |
| e. Termination by US without | Not Applicable | Not Applicable |
| cause | ||
| f. Termination by US with cause | Section 14 | WE can terminate if YOU commit certain events of default or other breaches of the Franchise Agreement |
| g. "Cause" defined - curable defaults | Section 14.1 | YOU have 30 days to cure: nonpayment of fees, nonperformance of franchise agreement where performance can be completed |
| h. “Cause” defined - non- curable defaults | Section 14.1 | non-curable defaults: bankruptcy (may not be enforceable under federal bankruptcy law), unauthorized transfers, abandonment, trademark misuse |
| i. YOUR obligations on termination/nonrenewal | Section 14.4; 14.5; 14.6 & 14.7 | pay amounts due; sell Home to Franchisor |
| j. Assignment of contract by | Section 13.1 | Assignee reasonably willing and able to |
| US | perform | |
| k. "Transfer" by YOU - | Section 2.20; |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP (FDD pages 25–27)
What This Means (2025 FDD)
According to Beehive Homes's 2025 Franchise Disclosure Document, Item 17 outlines the franchisee's obligations upon termination or non-renewal of the franchise agreement. Specifically, the franchisee is required to pay all outstanding amounts owed to Beehive Homes. Additionally, the franchisee is obligated to sell the physical Home location to Beehive Homes.
Furthermore, Beehive Homes retains the option to purchase the franchisee's business in the event of default. If Beehive Homes exercises this option, the purchase price will be determined based on the initial cost of the real property and the book value of the personal property associated with the business. This clause provides Beehive Homes with a mechanism to regain control of the location and assets in situations where the franchisee fails to meet their contractual obligations.
It is important for prospective Beehive Homes franchisees to carefully consider these termination provisions. The requirement to sell the Home to Beehive Homes, coupled with the franchisor's option to purchase the business at a potentially discounted value during default, could have significant financial implications. Franchisees should seek legal and financial advice to fully understand the potential consequences of termination and to assess the risks associated with these clauses.