If Beehive Homes assigns the franchise contract, what is the requirement of the assignee?
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 |
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' 2025 Franchise Disclosure Document, if Beehive Homes assigns the franchise agreement, the assignee must be reasonably willing and able to perform the obligations outlined in the agreement. This means that if Beehive Homes decides to transfer its rights and responsibilities under the franchise agreement to another party, that party must demonstrate the capacity and intention to fulfill those obligations.
For a prospective franchisee, this clause offers some assurance that any assignment of the contract by Beehive Homes will be to a competent party. It suggests that Beehive Homes cannot simply transfer the agreement to an entity incapable of upholding the franchisor's responsibilities. This could include maintaining brand standards, providing necessary support, and fulfilling other commitments outlined in the franchise agreement.
However, the FDD does not provide specific details on how "reasonably willing and able to perform" is defined or assessed. A prospective franchisee should seek clarification from Beehive Homes regarding the criteria used to evaluate potential assignees. Understanding these criteria can help a franchisee assess the potential impact of an assignment on their business and the level of support they can expect from a new franchisor.