Does Beehive Homes have a right of first refusal to acquire a franchisee's business?
Beehive_Homes Franchise · 2025 FDDAnswer from 2025 FDD Document
| 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. YOUR obligations on termination/nonrenewal | Section 14.4; 14.5; 14.6 & 14.7 | pay amounts due; sell Home to Franchisor |
| j. Assignment of contract by | Section 13.1 | Assignee reasonably willing and able to |
| US | perform | |
| k. "Transfer" by YOU - | Section 2.20; | includes transfer of contract or assets and |
| defined | 13.2 | change in ownership |
| l. OUR approval of transfer | Section 13.4 | prior written approval but not |
| by YOU | unreasonably withheld | |
| m. Conditions for OUR | Section 13.4 | payment of fees, new franchise |
| approval of transfer | agreement, training | |
| n. OUR right of first refusal | Section 13.6 | WE can match any offer |
| to acquire YOUR business | ||
| o. OUR option to purchase YOUR business | Section 14.5 | WE can purchase YOUR business for the initial cost of the real property and the book value of the personal property upon an Event of Default |
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' 2025 Franchise Disclosure Document, Beehive Homes retains the right of first refusal to acquire a franchisee's business. Specifically, Beehive Homes has the ability to match any offer a franchisee receives from a third party when the franchisee seeks to transfer their business. This provision is detailed within Section 13.6 of the franchise agreement.
This right of first refusal means that if a franchisee wants to sell their Beehive Homes franchise, they must first offer Beehive Homes the opportunity to purchase the business on the same terms as any legitimate offer they've received. This allows Beehive Homes to maintain control over who enters the system and prevents unwanted or unqualified buyers from acquiring a franchise location. It is a fairly common practice in franchising, intended to protect the brand and ensure consistency across the franchise network.
Additionally, Beehive Homes also has the option to purchase a franchisee's business upon an Event of Default. In this instance, according to Section 14.5, Beehive Homes can purchase the business for the initial cost of the real property and the book value of the personal property. This provides Beehive Homes with an avenue to regain control of a franchise location if the franchisee is not meeting their obligations under the franchise agreement. Prospective franchisees should understand these conditions under which Beehive Homes can acquire their business, as it can significantly impact their exit strategy and potential return on investment.