In Michigan, is a proposed transferee's unwillingness to comply with lawful obligations considered good cause for Beehive Homes to refuse a transfer?
Beehive_Homes Franchise · 2025 FDDAnswer from 2025 FDD Document
- (g) A provision which permits a franchisor to refuse to permit a transfer of ownership of a franchise, except for good cause.
This subdivision does not prevent a franchisor from exercising a right of first refusal to purchase the franchise.
Good cause shall include, but is not limited to: (i) The failure of the proposed transferee to meet the franchisor's then current reasonable qualifications or standards. (ii) The fact that the proposed transferee is a competitor of the franchisor or subfranchisor. (iii) The unwillingness of the proposed transferee to agree in writing
to comply with all lawful obligations. (iv) The failure of the franchisee or proposed transferee to pay any sums owing to the franchisor or to cure any default in the franchise agreement existing at the time of the proposed transfer.
Source: Item 23 — RECEIPTS (FDD pages 34–123)
What This Means (2025 FDD)
According to Beehive Homes' 2025 Franchise Disclosure Document, Michigan law addresses conditions under which a franchisor can refuse a franchise transfer. Specifically, Michigan law states that a franchisor can refuse a transfer for "good cause."
In Michigan, good cause includes several factors. One of these is "[t]he unwillingness of the proposed transferee to agree in writing to comply with all lawful obligations." This means that if a potential buyer of a Beehive Homes franchise in Michigan is unwilling to commit to following all legal requirements associated with the franchise, Beehive Homes has grounds to deny the transfer.
This provision protects Beehive Homes by ensuring that any new franchisee is willing to adhere to all legal and contractual obligations. It also helps maintain the integrity and reputation of the Beehive Homes brand by preventing transfers to individuals who may not be compliant with the law. For a prospective franchisee in Michigan, this means that any potential buyer must be fully prepared to agree to all lawful obligations to gain approval from Beehive Homes for the transfer.