Who receives the additional transfer fee from the Beehive Homes franchisee?
Beehive_Homes Franchise · 2025 FDDAnswer from 2025 FDD Document
- 13.5. Unauthorized Transfer. If Franchisee engages in an Unauthorized Transfer as provided in Section 13.2 or Section 13.6, Franchisee hereby covenants and promises to pay to Franchisor, in addition to all other costs and expenses provided for in this Agreement, an additional transfer fee in an amount equal to ten (10) times [5% times [12 times [the greater of (i) the average published monthly rate per resident of the Home during the 12 months preceding the Unauthorized Transfer, times the number of beds in the Home, or (ii) the average published monthly rate per resident of the home which has been in operation for the preceding 18 month and is in nearest geographic proximity to the Home , times the number of beds in the Home]]]. The parties hereto agree that this additional transfer fee is not a penalty, but the parties' best estimate of the anticipated damage to Franchisor resulting from the Unauthorized Transfer.
Source: Item 23 — RECEIPTS (FDD pages 34–123)
What This Means (2025 FDD)
According to Beehive Homes' 2025 Franchise Disclosure Document, if a franchisee engages in an unauthorized transfer, they must pay an additional transfer fee to Beehive Homes. This fee is calculated as ten times the product of 5%, 12, and the greater of two values: (i) the average published monthly rate per resident of the Home during the 12 months preceding the Unauthorized Transfer, times the number of beds in the Home, or (ii) the average published monthly rate per resident of a comparable home which has been in operation for the preceding 18 months and is in nearest geographic proximity to the Home, times the number of beds in the Home.
Beehive Homes considers this additional transfer fee not as a penalty but as a reasonable estimate of the anticipated damages they would incur due to the unauthorized transfer. This fee is in addition to any other costs and expenses outlined in the Franchise Agreement.
This provision is designed to discourage franchisees from transferring their franchise without proper authorization from Beehive Homes, as such transfers can potentially harm the brand and its established standards. Franchisees should be aware of the conditions under which a transfer is considered unauthorized and the significant financial implications of violating these terms.