What are the potential consequences if a Beehive Homes franchisee does not meet the requirements for renewal?
Beehive_Homes Franchise · 2025 FDDAnswer from 2025 FDD Document
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| PROVISION | FRANCHISE AGREEMENT SECTION | SUMMARY |
|---|---|---|
| a. Length of the franchise | Section 5.1 | ten years |
| term | ||
| b. Renewal or extension of | Section 5.2 | additional ten year renewal periods if you |
| the term | are in good standing | |
| c. Requirements for franchisees to renew or extend | Section 5 | three to nine month advance notice, approval by US, and signing by YOU of the current form of franchise agreement, which may have materially different terms and conditions from your initial franchise agreement |
| d. Termination by YOU | Not Applicable | Not Applicable |
| e. Termination by US without | Not Applicable | Not Applicable |
| cause | ||
| f. Termination by US with cause | Section 14 | WE can terminate if YOU commit certain events of default or other breaches of the Franchise Agreement |
| g. "Cause" defined - curable defaults | Section 14.1 | YOU have 30 days to cure: nonpayment of fees, nonperformance of franchise agreement where performance can be completed |
| h. “Cause” defined - non- curable defaults | Section 14.1 | non-curable defaults: bankruptcy (may not be enforceable under federal bankruptcy law), unauthorized transfers, abandonment, trademark misuse |
| i. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP (FDD pages 25–27)
What This Means (2025 FDD)
According to Beehive Homes's 2025 Franchise Disclosure Document, if a franchisee fails to meet the renewal requirements, the franchise will not be extended for an additional ten-year term. The requirements for renewal include providing three to nine months advance notice, obtaining approval from Beehive Homes, and signing the current form of the franchise agreement. This new agreement may contain terms and conditions that are materially different from the initial franchise agreement.
Upon non-renewal, Beehive Homes outlines specific obligations for the franchisee. These include paying all outstanding amounts owed to Beehive Homes and selling the Home to the franchisor. This means a franchisee who is not granted a renewal will be required to cease operations under the Beehive Homes brand and transfer ownership of the physical location to the franchisor.
Additionally, after the franchise expires or is terminated, the franchisee is subject to non-competition covenants. This prevents the franchisee from involvement in any competing business for three years. It is important to also refer to the state cover page of the Franchise Disclosure Document for any special provisions applicable to the franchisee's state, as these may include additional information concerning rights related to termination and renewal.
It is important to note that Beehive Homes also has the option to purchase the franchisee's business for the initial cost of the real property and the book value of the personal property if an Event of Default occurs. This could have significant financial implications for a franchisee who is not in compliance with the franchise agreement.