In Michigan, does the Beehive Homes FDD require a renewal provision?
Beehive_Homes Franchise · 2025 FDDAnswer from 2025 FDD Document
- (e) A provision that permits the franchisor to refuse to renew a franchise on terms generally available to other franchisees of the same class or type under similar circumstances.
This section does not require a renewal provision.
Source: Item 23 — RECEIPTS (FDD pages 34–123)
What This Means (2025 FDD)
According to Beehive Homes' 2025 Franchise Disclosure Document, Michigan law addresses franchise renewals but does not mandate a renewal provision. Instead, it focuses on protecting franchisees in the event that a franchisor chooses not to renew the franchise agreement. Specifically, Michigan prohibits franchisors from refusing to renew a franchise without fairly compensating the franchisee for the fair market value of their inventory, supplies, equipment, fixtures, and furnishings at the time of expiration.
This protection applies only if two conditions are met: first, the franchise term must be less than 5 years; and second, the franchisee must be prohibited from continuing the same business under a different brand in the same area after the franchise expires, or the franchisee does not receive at least 6 months' advance notice of the franchisor's intent not to renew. This ensures that franchisees are not left without recourse if their franchise is not renewed after a short term, and they are restricted from continuing similar operations.
The FDD clarifies that Michigan law does not require Beehive Homes to offer a renewal provision at all. However, if Beehive Homes chooses not to renew a franchise under the specified conditions, they must provide fair compensation as described. This section of the FDD aims to inform prospective franchisees in Michigan of their rights and protections under state law regarding franchise renewals and non-renewals.