Is the initial franchise fee for Beehive Homes refundable?
Beehive_Homes Franchise · 2025 FDDAnswer from 2025 FDD Document
AND FRANCHISE ROYALTY
- 4.1. Initial Franchise Fee. Franchisee hereby promises and agrees to pay to Franchisor an initial franchise fee (the "Initial Franchise Fee") of Seventy-Five Thousand Dollars ($75,000.00), payable one-third upon signing of this Agreement and the balance in full upon the earlier to occur of the following: (i) the funding of any construction loan for the Home; or (ii) the issuance of a building permit for the Home. The Initial Franchise Fee is fully earned and nonrefundable as and when paid as consideration for the expenses incurred by Franchisor in furnishing assistance and service to Franchisee and for Franchisor's lost or deferred opportunity to franchise to others. If the Franchise Fee is not paid in full on or before the date which is one year after the Effective Date of this Agreement, Franchisor may, in its sole discretion, terminate this Agreement, and no fees will be refunded to Franchisee.
- 4.2. Initial Franchise Fee for Additional Franchises. Franchisees in good standing and all of whose franchised Homes are open and operating may acquire additional franchises by paying the then current franchise fee for each additional franchise offered by Franchisor, subject to approval by the Franchisor. The current franchise fee for each additional franchise is Fifty Thousand Dollars ($50,000.00), payable in full upon the execution of a franchise agreement for the additional franchise and is fully earned and nonrefundable upon payment. This current fr
Source: Item 23 — RECEIPTS (FDD pages 34–123)
What This Means (2025 FDD)
According to Beehive Homes' 2025 Franchise Disclosure Document, the initial franchise fee is generally nonrefundable. The standard initial franchise fee is $75,000, and for franchisees acquiring additional franchises, the fee is $50,000. These fees are considered fully earned upon payment.
The FDD specifies that the initial franchise fee compensates Beehive Homes for expenses incurred in providing assistance and services to the franchisee, as well as for the opportunity cost of not franchising to others. This means that once the fee is paid, Beehive Homes considers it compensation for their efforts and lost opportunities, regardless of whether the franchise ever opens or becomes successful.
However, there is a condition under which Beehive Homes may terminate the agreement if the initial franchise fee is not paid in full within one year of the agreement's effective date. In such a case, the FDD states that no fees will be refunded to the franchisee. This reinforces the nonrefundable nature of the fee once paid, but also provides a deadline for full payment. Prospective franchisees should be aware of this policy and ensure they have the necessary funds available within the specified timeframe to avoid potential termination of the agreement and loss of any partial payments made.