When does Beehive Homes recognize revenue from nonrefundable transfer fees?
Beehive_Homes Franchise · 2025 FDDAnswer from 2025 FDD Document
The Company derives revenue from nonrefundable transfer fees, which are charged to existing franchisees when they want to transfer their franchise license to another franchisee. The nonrefundable transfer fee is reimbursement to the Company for legal, accounting, credit, and investigation expenses incurred in support of facilitating the transfer. These fees are earned and recognized at the time of the transfer.
Source: Item 23 — RECEIPTS (FDD pages 34–123)
What This Means (2025 FDD)
According to Beehive Homes' 2025 Franchise Disclosure Document, the company recognizes revenue from nonrefundable transfer fees at the time of the transfer. These fees are charged to existing franchisees who transfer their franchise license to another franchisee. Beehive Homes considers these fees as reimbursement for expenses related to facilitating the transfer, including legal, accounting, credit, and investigation costs.
For a prospective Beehive Homes franchisee, this means that if they decide to sell their franchise to another party, they will be charged a transfer fee. This fee covers Beehive Homes' costs associated with the transfer process. The revenue from this fee is recognized by Beehive Homes when the transfer is completed.
It is important for potential franchisees to understand that this transfer fee is nonrefundable, meaning that if the transfer does not go through for any reason, the fee will not be returned. This is a standard practice in franchising, as the franchisor incurs costs regardless of whether the transfer is finalized. Franchisees should factor this potential cost into their financial planning when considering the possibility of selling their franchise in the future.