factual

Is subfranchising permitted for Better Homes And Gardens Real Estate franchisees?

Better_Homes_And_Gardens_Real_Estate Franchise · 2025 FDD

Answer from 2025 FDD Document

Provision Section in Agreement Summary
a. Length of the franchise term Section 1.5 of the Franchise Agreement; Section 1 of the Location Addendum And Section 1 of the Term Extension Addendum ______________________________ Section 2 of the Limited Purpose Office Addendum. Commences upon the Opening Date and expires on the date 10 years from the Opening Date. We have the right, however, to negotiate with you a greater or lesser term under your Franchise Agreement. ________________________________ One-year initial term with a right to extend for additional one-year terms
b. Renewal or extension of the term Section 16.1 of the Franchise Agreement; Section 1 of the Location Addendum; Section 1 Term Extension Addendum No renewal rights. If we grant you an additional term, we may require you to sign our then current Franchise Agreement or a Term Extension Addendum with materially different terms.
Section 2 of the Limited Purpose Office Addendum Term is automatically extended for additional one-year periods until terminated in accordance with the terms of the Addendum
c. Requirements for you to renew or extend Sections 1.5 and 16.1 of the Franchise Agreement; Location Addendum; Section 1 of the Term Extension Addendum THE FRANCHISE RELATIONSHIP No renewal rights. If we grant you an additional term, we may require you to sign our then current Franchise Agreement or Term Extension Addendum with materially different terms.
Provision Section in Agreement Summary
d. Termination by you Section 16.2.5 of the Franchise Agreement; Section 1 of the Location Addendum; Section 1 of the Term Extension Addendum Subject to state law, if a majority owner dies or becomes disabled, you may elect to terminate the Franchise Agreement if certain conditions are satisfied. The Franchise Agreement can also be mutually terminated.
Section 7 of the Limited Purpose Office Subject to state law, either party may
Addendum terminate upon 30 days' notice.
e. Termination by None Not applicable
us without cause
Section 7 of the Limited Purpose Office Either party may terminate upon 30 days'
Addendum notice
f. Termination by us with cause Section 16.2.2 of the Franchise Agreement We can terminate if you commit a breach, including any one of several listed violations, or if certain events occur; see "g" below.
Section 7 of the Limited Purpose Addendum We can terminate for non-compliance with the addendum or if the Franchise Agreement expires or is terminated.
g. "Cause" defined defaults which can be cured Sections 16.2.3 and 16.2.6 of the Franchise Agreement Cause means any material breach by you of your obligations, including non-payment of fees. You have 30 days to cure financial breaches; failure to assign after your death or incompetency; subfranchising by you; failure to comply with all applicable laws; operating any other business within the franchise location using the Marks; failure to properly display and use the Marks; failure to begin operating the Franchise as required under the Franchise Agreement or any Addenda; creation of a security interest in the Franchise Agreement or assets of the Business without our prior written consent; or any other material breach of the Franchise Agreement. If you are notified that your office fails to meet our Minimum Office Design and Appearance Standards, you have 90 days to correct the deficiencies. If these deficiencies are not corrected timely, we have the right to terminate the Franchise Agreement.

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 63–67)

What This Means (2025 FDD)

According to Better Homes And Gardens Real Estate's 2025 Franchise Disclosure Document, subfranchising by a franchisee can be grounds for termination of the franchise agreement. Specifically, if a franchisee engages in subfranchising, Better Homes And Gardens Real Estate has the right to terminate the Franchise Agreement, as this is considered a material breach of the agreement.

This means that a Better Homes And Gardens Real Estate franchisee is not permitted to subfranchise the business. If a franchisee violates this rule, Better Homes And Gardens Real Estate has grounds to terminate the franchise agreement.

This is a fairly standard restriction in franchising, as franchisors typically want to maintain control over the brand and the selection of franchisees. Allowing subfranchising could dilute the brand and create inconsistencies in the operation of the franchise system.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.
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