Under what condition is Beehive Homes permitted to transfer its obligations to fulfill contractual obligations to the franchisee?
Beehive_Homes Franchise · 2025 FDDAnswer from 2025 FDD Document
[Alternate paragraph to be used for Assignment to Corporation.]
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- Without the prior written consent of Bee Hive Homes, Assignor, Assignee, and Shareholders may not, either voluntarily or by operation of law, make or permit:
- a) any further transfer or assignment of the Franchise or the Franchise Agreement;
- b) any pledge or encumbrance of the Franchise;
- c) any assignment, transfer, or pledge of any equity interest in Assignee including, but not limited to, transfers in any entity that is a Shareholder;
- d) the creation of new or additional equity interests in Assignee; or
- e) any amendment of the terms of any organizational documents relating to Assignee.
Equity interests, as used in this Assignment, include direct or indirect equity or beneficial interests in Assignee and the business risks associated with the Franchise including, but not limited to, interests stated as debt that include any type of risk-taking interest or any interest in the profits or appreciation of the Home.
[Alternate paragraph to be used for Assignment to Partnership.]
Source: Item 23 — RECEIPTS (FDD pages 34–123)
What This Means (2025 FDD)
According to Beehive Homes' 2025 Franchise Disclosure Document, Beehive Homes' ability to transfer its obligations to fulfill contractual obligations to the franchisee is restricted. Specifically, if the franchisee is assigning their rights to a corporation, partnership, or limited liability company, the assignee must fulfill all obligations under the Franchise Agreement. The assignor (original franchisee) remains personally bound by the Franchise Agreement and liable for any breaches, unless Beehive Homes provides prior written consent.
Without Beehive Homes' prior written consent, the assignor, assignee, and shareholders/partners/members cannot make or permit any further transfer or assignment of the franchise or the Franchise Agreement. They also cannot pledge or encumber the franchise, assign, transfer, or pledge any equity interest in the assignee, create new equity interests in the assignee, or amend the organizational documents of the assignee. These restrictions ensure that Beehive Homes maintains control over who operates a franchise and that the standards of the franchise system are upheld.
For a prospective Beehive Homes franchisee, this means that while you may be able to assign your franchise rights to a business entity, doing so is subject to strict conditions and requires Beehive Homes' approval. The original franchisee remains liable unless Beehive Homes provides written consent to release them. This protects Beehive Homes from potential breaches of the Franchise Agreement and ensures that any new entity operating the franchise meets their standards. It is important to carefully review these conditions and seek legal counsel before considering any assignment of franchise rights.