What representation do Assignor, Assignee, and Shareholders/Partners/Members make to Beehive Homes regarding equity interests in Assignee?
Beehive_Homes Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Assignor, Assignee, and [Shareholders/Partners/Members] represent and warrant that:
- a) they are the only persons or entities with equity interests in Assignee and their ownership interests are as shown on Exhibit A; and
- b) there is no obligation or intention to issue additional equity interests in Assignee.
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- If any [Shareholders/Partners/Members] are trustees or trusts:
- a) the beneficial interests in the trusts may not be assigned, transfers to successor trustees or special trustees may not be made even if the transfer is provided for in any trust agreement, and the trust agreement may not be amended without the prior written consent of Bee Hive Homes;
- b) Exhibit A lists all persons who are trustees of any nature or have beneficial interests in any [Shareholder's/Partner's/Member's] trust(s);
- c) this Assignment is not a consent to any future transfers of equity interest(s) of Assignee to any [Shareholder's/Partner's/Member's] trust beneficiaries based on any
condition including, but not limited to, attainment of a certain age or occurrence of any event. All future transfers or vesting of equity interest(s) of Assignee are subject to this Assignment; and
Source: Item 23 — RECEIPTS (FDD pages 34–123)
What This Means (2025 FDD)
According to the 2025 Beehive Homes Franchise Disclosure Document, in the context of an assignment, the Assignor, Assignee, and any Shareholders/Partners/Members make specific representations and warranties to Beehive Homes regarding equity interests in the Assignee. They represent and warrant that they are the only persons or entities with equity interests in the Assignee, and their ownership interests are as shown on Exhibit A. They also represent that there is no obligation or intention to issue additional equity interests in the Assignee.
These representations are crucial for Beehive Homes to maintain control over the ownership and management structure of its franchisees. By requiring these assurances, Beehive Homes aims to prevent unauthorized transfers of ownership or the creation of new equity interests that could dilute control or introduce unapproved parties into the franchise operation. This is a common practice in franchising, as franchisors typically want to carefully vet and approve all individuals or entities with a significant stake in the franchise.
Furthermore, if any Shareholders/Partners/Members are trustees or trusts, there are additional stipulations. The beneficial interests in the trusts may not be assigned, transfers to successor trustees or special trustees may not be made, and the trust agreement may not be amended without Beehive Homes' prior written consent. Exhibit A must list all persons who are trustees of any nature or have beneficial interests in any Shareholder's/Partner's/Member's trust(s). The assignment does not constitute consent to any future transfers of equity interest(s) of Assignee to any Shareholder's/Partner's/Member's trust beneficiaries based on any condition. All future transfers or vesting of equity interest(s) of Assignee are subject to the assignment.
These conditions ensure that Beehive Homes retains control over any changes in ownership, even within trusts, and that any future transfers are subject to their approval. This level of scrutiny is intended to protect the Beehive Homes brand and ensure that all franchisees and equity holders meet their standards and obligations.