In Michigan, what is the required notice Beehive Homes must give if they intend not to renew a franchise?
Beehive_Homes Franchise · 2025 FDDAnswer from 2025 FDD Document
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 franchisees are entitled to certain protections under the Michigan Franchise Investment Law. Specifically, Beehive Homes must provide at least six months' advance notice if they do not intend to renew a franchise, but only if two conditions are met. First, the franchise term must be less than five years. Second, the franchisee must be prohibited from operating a similar business under a different brand in the same area after the franchise expires, OR the franchisee does not receive at least six months advance notice of non-renewal.
This provision ensures that franchisees have adequate time to prepare for the end of their franchise agreement, whether by seeking renewal, selling the business, or making other arrangements. If Beehive Homes fails to provide the required notice and the franchisee meets the specified conditions, the franchisee may have grounds to challenge the non-renewal.
It's important to note that this protection applies only if the franchise term is less than five years and the franchisee is restricted from operating a similar business post-expiration. If the franchise term is longer or the franchisee is not subject to such restrictions, the standard renewal terms outlined in the franchise agreement would apply. This section does not require a renewal provision.