In Michigan, is Beehive Homes prohibited from including unfair provisions in its franchise documents?
Beehive_Homes Franchise · 2025 FDDAnswer from 2025 FDD Document
THE FOLLOWING APPLY ONLY TO TRANSACTIONS GOVERNED BY THE MICHIGAN FRANCHISE INVESTMENT LAW
THE STATE OF MICHIGAN PROHIBITS CERTAIN UNFAIR PROVISIONS THAT ARE SOMETIMES IN FRANCHISE DOCUMENTS. IF ANY OF THE FOLLOWING PROVISIONS ARE IN THESE FRANCHISE DOCUMENTS, THE PROVISIONS ARE VOID AND CANNOT BE ENFORCED AGAINST YOU.
(a) A prohibition of the right of a franchisee to join an association of franchisees.
(b) A requirement that a franchisee assent to a release, assignment, novation, waiver, or estoppel which deprives a franchisee of rights and protections provided in this act.
This shall not preclude a franchisee, after entering into a franchise agreement, from settling any and all claims.
- (c) A provision that permits a franchisor to terminate a franchise prior to the expiration of its term except for good cause.
Good cause shall include the failure of the franchisee to comply with any lawful provision of the franchise agreement and to cure such failure after being given written notice thereof and a reasonable opportunity, which in no event need be more than 30 days, to cure such failure.
- (d) A provision that permits a franchisor to refuse to renew a franchise without fairly compensating the franchisee by repurchase or other means for the fair market value at the time of expiration of the franchisee's inventory, supplies, equipment, fixtures, and furnishings.
Personalized materials which have no value to the franchisor and inventory, supplies, equipment, fixtures, and furnishings not reasonably required in the conduct of the franchise business are not subject to compensation.
This subsection applies only if: (i) the term of the franchise is less than 5 years; and (ii) the franchisee is prohibited by the franchise or other agreement from continuing to conduct substantially the same business under another trademark, service mark, trade name, logotype, advertising, or other commercial symbol in the same area subsequent to the expiration of the franchise or the franchisee does not receive at least 6 months advance notice of franchisor's intent not to renew the franchise.
- (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 franchise law prohibits certain unfair provisions in franchise documents. If any of these provisions are present in the Beehive Homes franchise documents, they are considered void and unenforceable against the franchisee.
Specifically, Beehive Homes cannot enforce provisions that: prohibit a franchisee from joining a franchisee association; require a franchisee to waive rights and protections under the Michigan Franchise Investment Law; allow Beehive Homes to terminate a franchise before its term expires without good cause (defined as failure to comply with the agreement, given notice and a reasonable opportunity to cure, which need not exceed 30 days); permit Beehive Homes to refuse renewal without fairly compensating the franchisee for the fair market value of inventory, supplies, equipment, fixtures, and furnishings (excluding personalized materials or items not reasonably required for the business), applicable only if the franchise term is less than 5 years and the franchisee is restricted from operating a similar business in the same area after expiration or does not receive at least 6 months' notice of non-renewal; or allow Beehive Homes to refuse renewal on terms generally available to other franchisees in similar circumstances.
It is important to note that the prohibition regarding refusal to renew does not require Beehive Homes to offer a renewal provision at all. This section clarifies the specific protections afforded to franchisees under Michigan law, ensuring that certain overreaching provisions sometimes found in franchise agreements are not enforceable in that state.