How do Beehive Homes royalty fees fluctuate?

According to Beehive Homes' 2025 Franchise Disclosure Document, the franchise royalty fee is 5% of gross revenues. The FDD states that the royalty fees will fluctuate directly with the level of sales generated by franchisees. This means that as a franchisee's gross revenues increase, the royalty fees paid to Beehive Homes will also increase proportionally. Conversely, if a franchisee's gross revenues decrease, the royalty fees will also decrease.

The franchise royalty is paid monthly, specifically on or before the 10th day of each calendar month, based on the gross revenues of the preceding calendar month. Beehive Homes defines "Gross Revenues" as the gross receipts of every kind and nature received by the franchisee, directly or indirectly, in connection with the operation of the franchised business, the Home, and/or providing of services. The only exception to this definition is the amount of sales or use taxes levied upon the sale of goods or services by a governmental taxing authority and actually paid to said taxing authority.

Beehive Homes begins collecting the Franchise Royalty on the earlier of two dates: (i) the first day of the first full calendar month following the date on which the Home reaches 50% occupancy; or (ii) the first day of the sixth full calendar month following the date of opening of the Home. This means that a new franchisee might not owe royalty fees for up to six months after opening, providing some initial financial relief while building their business. However, the royalty payment is tied to occupancy rate, so franchisees need to focus on filling beds to trigger the royalty obligation.

It's important to note that Beehive Homes assesses a late charge of $100.00 for each Monthly Revenues Report which is not timely filed. Additionally, if a franchisee fails to pay any Franchise Royalty when due, they will be assessed a one-time late charge equal to the lesser of ten percent (10%) of the Franchise Royalty due or, if less, the maximum late charge assessable under the laws of the state in which the Home is located. Therefore, franchisees must ensure timely submission of reports and payments to avoid these additional charges.