Does the Beem Light Sauna agreement consider a series of related transactions as a 'Control Transfer'?
Beem_Light_Sauna Franchise · 2025 FDDAnswer from 2025 FDD Document
For purposes of this Agreement, "Transfer" as a verb means to sell, assign, give away, transfer, pledge, mortgage, or encumber, either voluntarily or by operation of law (such as through divorce or bankruptcy proceedings), any interest in (a) this Agreement, (b) the Studio, (c) all or substantially all the assets related to the Studio, or (d) in the ownership of the franchisee Entity. "Transfer" as a noun means any such sale, assignment, gift, transfer, pledge, mortgage, or encumbrance. A "Control Transfer" means any Transfer of (i) this Agreement or any interest in this Agreement; (ii) the Studio or all or substantially all of the Studio's assets; or (iii) any Controlling Interest (defined below) in your Entity, whether directly or indirectly through a transfer of legal or beneficial ownership interests in any Owner that is an Entity, and whether in one transaction or a series of related transactions, regardless of the time period over which these transactions take place. References to a "Controlling Interest" in you mean either (a) 20% or more of the direct or indirect legal or beneficial ownership interests in your Entity or (b) the acquisition of an ownership interest or other right or interest which grants the power (whether directly or indirectly) to direct or cause the direction of management and polices of you or the Studio to any individual or Entity, or group of individuals or Entities, that did not have that power before that acquisition.
Source: Item 23 — RECEIPT (FDD pages 71–230)
What This Means (2025 FDD)
According to the 2025 Beem Light Sauna Franchise Disclosure Document, a 'Control Transfer' includes the transfer of the franchise agreement, the Studio's assets, or a Controlling Interest in the franchisee's entity. The agreement specifies that a 'Control Transfer' can occur not only through a single transaction but also through a series of related transactions, regardless of the time period over which these transactions occur.
For a prospective Beem Light Sauna franchisee, this definition is important because it means that the franchisor's consent is required even if control of the franchise changes hands gradually through multiple transactions. This prevents a franchisee from circumventing the transfer restrictions by breaking up a transfer into smaller parts.
The term 'Controlling Interest' is defined as either 20% or more of the direct or indirect legal or beneficial ownership interests in the franchisee's entity, or the acquisition of an ownership interest that grants the power to direct the management and policies of the franchisee or the Studio. This broad definition ensures that any significant change in ownership or control is subject to the franchisor's approval, protecting the Beem Light Sauna brand and system standards.