Who is obligated for damages arising out of the operation of the Beehive Homes business?
Beehive_Homes Franchise · 2025 FDDAnswer from 2025 FDD Document
title, and interest of | 4. Assignee must pay all fees and perform all obligations under the Franchise Agreement.
- Assignor agrees to remain personally bound by, and personally liable for the breach of, each and every provision of the Franchise Agreement, both monetary obligations and obligations to take or refrain from taking specific actions or to engage or refrain from engaging in specific activities, and is not released from any obligations to Bee Hive Homes by this Assignment. After the date of this Assignment, all references to Franchisee in the Franchise Agreement shall refer to both Assignor and Assignee both jointly and severally.
[Alternate paragraph to be used for Assignment to Corporation.]
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- Without the prior written consent of Bee Hive Homes, Assignor, Assignee, and Shareholders may not, either voluntarily or by operation of law, make or permit:
- a) any further transfer or assignment of the Franchise or the Franchise Agreement;
- b) any pledge or encumbrance of the Franchise;
Source: Item 23 — RECEIPTS (FDD pages 34–123)
What This Means (2025 FDD)
According to the 2025 Beehive Homes Franchise Disclosure Document, when a franchise is assigned, both the assignor (the original franchisee) and the assignee (the new franchisee) are responsible for any breaches of the Franchise Agreement. Specifically, the assignor remains personally liable for any breaches, whether they involve monetary obligations or specific actions required or prohibited by the agreement. This means that even after transferring the franchise, the original franchisee is still on the hook if the new franchisee fails to meet the obligations outlined in the Franchise Agreement.
This dual liability continues after the assignment, with all references to 'Franchisee' in the original agreement applying to both the assignor and the assignee jointly and severally. This ensures that Beehive Homes has recourse against both parties in case of any non-compliance or damages. This arrangement protects Beehive Homes' interests by providing multiple avenues for recovery in case of a breach.
Furthermore, if the assignor, assignee, or any related shareholders, partners, or members breach any conditions, representations, agreements, or warranties within the assignment, Beehive Homes is entitled to all legal remedies available. This includes remedies granted to Beehive Homes by the Franchise Agreement itself. This broad statement reinforces Beehive Homes' ability to pursue legal action and seek compensation for damages resulting from any breach related to the franchise operation. This clause is designed to ensure compliance and protect the brand's standards and reputation.