What responsibilities does the Assignor retain after assigning the Beehive Homes franchise?
Beehive_Homes Franchise · 2025 FDDAnswer from 2025 FDD Document
- Assignor agrees to remain personally bound by, and personally liable for the breach of, each and every provision of the Franchise Agreement, both monetary obligations and obligations to take or refrain from taking specific actions or to engage or refrain from engaging in specific activities, and is not released from any obligations to Bee Hive Homes by this Assignment. After the date of this Assignment, all references to Franchisee in the Franchise Agreement shall refer to both Assignor and Assignee both jointly and severally.
Source: Item 23 — RECEIPTS (FDD pages 34–123)
What This Means (2025 FDD)
According to Beehive Homes' 2025 Franchise Disclosure Document, the assignor remains bound by the original Franchise Agreement even after the assignment. Specifically, the assignor continues to be personally liable for any breaches of the Franchise Agreement, including both monetary obligations and requirements to take or avoid specific actions. This means that even though the rights to the Beehive Homes franchise are transferred to the assignee, the assignor's original commitments to Beehive Homes still stand. After the assignment date, any reference to 'Franchisee' in the original agreement refers to both the assignor and the assignee, jointly and severally. This ensures Beehive Homes has recourse to both parties for compliance.
This continued liability has significant implications for the assignor. Even after transferring the franchise, the assignor's personal assets remain at risk if the assignee fails to meet the obligations outlined in the Franchise Agreement. These obligations can range from maintaining specific operational standards to making required payments to Beehive Homes. The assignor needs to carefully vet the assignee and have confidence in their ability to successfully operate the Beehive Homes franchise.
This arrangement is not uncommon in franchising, as franchisors often want to ensure continuity and protect their brand standards. By keeping the assignor on the hook, Beehive Homes reduces its risk and maintains a level of control over the franchise even after ownership changes. Prospective assignors should seek legal counsel to fully understand the scope of their ongoing liability and consider obtaining indemnification from the assignee to mitigate potential losses.