Is ownership of the Beehive Homes home a condition of renewal?
Beehive_Homes Franchise · 2025 FDDAnswer from 2025 FDD Document
- 5.2. Renewal Terms. Subject to the terms and conditions set forth in Section 5.3 below, Franchisee may renew its franchise upon the expiration of the initial Term or any renewal Term for additional consecutive ten (10) year Terms by giving Franchisor written notice of intent to renew at least six (6) months but not more than nine (9) months prior to the expiration date of the then current Term. Failure of the Franchisee to give such notice shall constitute an Election Not to Renew, unless the law of the state in which the Home is located provides otherwise. The Franchisee shall not be required to pay any renewal fee or additional franchise fee in connection with any renewal hereunder.
- 5.3. Conditions to Renewal. Franchisee's renewal under Section 5.2 is subject to Franchisee's compliance with the following on the date of the notice of intent to renew and on the first day of the renewal Term: (i) Franchisee is not in default of any provision of this Agreement or any other Franchise Agreement or any other agreement with Franchisor or its Affiliates to which the Franchisee is a party; (ii) Franchisee is directly or indirectly the owner of the Home and will be for the renewal Term; (iii) Franchisee executes at least three (3) months prior to the first day of the renewal Term the then current form of Franchise Agreement being used by Franchisor, which Franchise Agreement may contain materially different terms from those contained in this Agreement; and (iv) Franchisee, its Home, equipment and procedures meet the current Standards applicable to new franchisees.
Source: Item 23 — RECEIPTS (FDD pages 34–123)
What This Means (2025 FDD)
According to Beehive Homes' 2025 Franchise Disclosure Document, ownership of the physical home is indeed a condition for renewing the franchise agreement. Specifically, to renew the franchise for additional 10-year terms, the franchisee must be the direct or indirect owner of the Beehive Homes location, not only at the time they provide notice of their intent to renew but also throughout the entire renewal term. This requirement ensures that the franchisee has a vested interest in the property and its ongoing operation.
This condition has significant implications for prospective Beehive Homes franchisees. It means that franchisees cannot simply lease the property; they must either own it directly or have an indirect ownership stake. This could involve purchasing the property outright or holding it through a separate entity. This requirement adds a layer of financial commitment and risk, as the franchisee is responsible for the property's upkeep, taxes, and any potential liabilities associated with ownership.
Furthermore, the FDD states that franchisees must execute the then-current form of the Franchise Agreement, which may contain materially different terms from the original agreement. In addition to owning the home, the franchisee must not be in default of any agreements with Beehive Homes, and the home, equipment, and procedures must meet the current standards applicable to new franchisees. These stipulations provide Beehive Homes with the flexibility to update its standards and agreement terms, ensuring that all renewed franchises align with the company's current vision and operational requirements.
In summary, the ownership requirement for renewal underscores the importance of long-term investment and commitment in the Beehive Homes franchise system. Prospective franchisees should carefully consider the financial implications of property ownership and the potential for changes in the franchise agreement upon renewal.