What specific costs and expenses must a non-compliant Beehive Homes franchisee pay related to litigation?
Beehive_Homes Franchise · 2025 FDDAnswer from 2025 FDD Document
ch of this Agreement.
- (b) If Franchisee engages in such non-compliance or unauthorized and/or improper use of the System or the Names and Marks during or after the Term, Franchisor or any of its Affiliates, together with the successors and assigns of each, will be entitled to both temporary and permanent injunctive relief against Franchisee from any court of competent jurisdiction, in addition to all other remedies Franchisor or its Affiliates may have at law. Franchisee consents to the entry of such temporary and permanent injunctions. Franchisee must payall costs and expenses, including reasonable attorneys' fees, expert fees, costs and other expenses of litigation that Franchisor and/or its Affiliates may incur in connection with Franchisee's non-compliance with this covenant.
VII. OBLIGATIONS OF FRANCHISOR
Franchisor has the following responsibilities to Franchisee under this Agreement. Franchisor reserves the right to fulfill some or all of these responsibilities through one or more of its Affiliates or through unrelated third parties, in its sole business judgment. Franchisor may require Franchisee to make payment for any resulting services or products directly to the provider.
7.1. Location. Franchisor shall provide assistance to Franchisee in the selection and evaluation of the Location. However, Franchisee is solely responsible for selecting and obtaining the Location for the Home and for construction of the Home at the Location. Franchisee is solely
responsible for the negotiation of all agreements and other contracts relating to the Location and all construction and improvement thereon.
Source: Item 23 — RECEIPTS (FDD pages 34–123)
What This Means (2025 FDD)
According to Beehive Homes' 2025 Franchise Disclosure Document, a franchisee may incur significant costs if they fail to comply with the terms of the franchise agreement, particularly concerning the use of Beehive Homes' names and marks. Specifically, if a franchisee's non-compliance or unauthorized use of the Beehive Homes system or names and marks leads to legal action, the franchisee is responsible for covering all associated costs and expenses.
These costs include reasonable attorneys' fees, expert fees, and other litigation-related expenses incurred by Beehive Homes and its affiliates. This obligation extends to any non-compliance or unauthorized use occurring during or after the franchise term. The FDD emphasizes that such non-compliance or unauthorized use can cause irreparable damage to Beehive Homes, justifying injunctive relief and the recovery of all legal costs.
Furthermore, if a claim, litigation, or administrative proceeding arises due to an act or omission by the franchisee, their owners, employees, or agents, or due to any incident on the Beehive Homes premises, the franchisee is obligated to indemnify and hold harmless Beehive Homes. This indemnification covers all judgments, settlements, penalties, and expenses, including attorneys' fees, court costs, and other litigation or administrative proceeding expenses. At Beehive Homes' discretion, the franchisee may also be required to defend Beehive Homes in such legal matters. This means a franchisee could face substantial financial burdens beyond their initial investment if they fail to adhere to the franchise agreement or if their operations lead to legal claims against Beehive Homes.