In Michigan, does Beehive Homes have a right of first refusal to purchase a franchise?
Beehive_Homes Franchise · 2025 FDDAnswer from 2025 FDD Document
13.6. Right of First Refusal. Franchisee hereby gives and grants to Franchisor and its designees an unrestricted right of first refusal with respect to any proposed Transfer, excluding Permitted Transfers, by Franchisee and/or its Equity Owner(s) (the "Transferor") of any Equity Interest. Transferor shall deliver written notice of the proposed Transfer to Franchisor, together with an executed copy of the valid, enforceable purchase agreement for the Transfer. Franchisor shall have until the sixtieth (60 th) day after receipt of the written notice of the proposed Transfer and the purchase agreement from the Transferor in which to elect to exercise this right of first refusal by delivery of a written notice of election to Transferor. If Franchisor elects to exercise its right of first refusal it shall do so in accordance with the terms and conditions of the purchase agreement; provided, however, that Franchisor shall have a minimum of thirty (30) days after the delivery of
the notice of election in which to make any payments which might sooner be required under the purchase agreement. If Franchisor does not elect to exercise its right of first refusal, the Transferor may proceed with the proposed Transfer to the proposed transferee named in and in accordance with the terms and conditions of the purchase agreement and subject to Section 13.2 of this Agreement. However, if the proposed Transfer is not completed in accordance with the terms and conditions of the purchase agreement, the requirements of this Section shall again apply to the proposed Transfer and must again be complied with. The parties hereto acknowledge and agree that any exercise of this right of first refusal shall be subordinate to and subject to any lien of the Small Business Administration. AnyTransfer byFranchisee and/or its EquityOwner(s) which does not complywith the terms and conditions of this Section 13.6 will be deemed an Unauthorized Transfer.
Source: Item 23 — RECEIPTS (FDD pages 34–123)
What This Means (2025 FDD)
According to Beehive Homes' 2025 Franchise Disclosure Document, Beehive Homes does have a right of first refusal regarding franchise transfers. Specifically, Beehive Homes retains the right to step in and purchase the franchise if a franchisee intends to transfer their equity interest to another party. This right, however, does not apply to "Permitted Transfers."
To initiate a transfer, the franchisee must provide Beehive Homes with written notice of the proposed transfer, including a copy of the executed purchase agreement. Beehive Homes then has 60 days to decide whether to exercise its right of first refusal. If Beehive Homes chooses to exercise this right, it must adhere to the terms and conditions outlined in the purchase agreement, with a minimum of 30 days to make any required payments.
If Beehive Homes decides not to exercise its right of first refusal, the franchisee can proceed with the transfer to the proposed transferee, provided the transfer adheres to the terms of the purchase agreement and Section 13.2 of the franchise agreement. Failure to comply with these transfer requirements will result in the transfer being classified as an unauthorized transfer. The FDD also notes that any exercise of the right of first refusal is subordinate to any lien of the Small Business Administration.