Does Beem Light Sauna have to consent to a transfer of the franchise agreement?
Beem_Light_Sauna Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Franchisee may not assign the Lease or sublet the Premises without Company's prior written consent, and Landlord will not consent to an assignment or subletting by Franchisee without first verifying that Company has given its written consent to Franchisee's proposed assignment or subletting.
(o) You and your Owners and the transferee and its owners must execute a consent to Transfer agreement in a form that we prescribe that describes the conditions that must be complied with in order to obtain our consent to the Transfer.
13.6 Transfer to an Entity.
We will consent to the assignment of this Agreement to an Entity that you form for the convenience of ownership, provided that: (i) the Entity has and will have no other business besides operating Studio; (ii) you satisfy the conditions in Sections 13.4(a) (pay the applicable Transfer Fee), 13.4(b) (all payments made), 13.4(c) (comply with obligations), 13.4(d) (sign general release), 13.4(e) (remain liable for pre-Transfer obligations), 13.4(f) (remain bound to certain provisions), and 13.4(j) (sign assignment and guaranty); and (iii) the Owners hold equity interests in the new Entity in the same proportion shown in Appendix A.
- 13.7 Permitted Transfers.
The other provisions in this Section do not apply, including our right of first refusal and right of approval, to the following Transfers:
Source: Item 23 — RECEIPT (FDD pages 71–230)
What This Means (2025 FDD)
According to the 2025 Beem Light Sauna Franchise Disclosure Document, Beem Light Sauna's consent is required for a transfer of the franchise agreement. Specifically, the franchisee may not assign the lease or sublet the premises without Beem Light Sauna's prior written consent. The landlord also has a responsibility to verify that Beem Light Sauna has provided written consent before agreeing to any assignment or subletting by the franchisee. This provision ensures that Beem Light Sauna maintains control over who operates a franchise under its brand.
This requirement is typical in franchising, as franchisors want to carefully vet potential new franchisees to ensure they meet the brand's standards and are likely to succeed. Beem Light Sauna also requires that both the franchisee and any potential transferee execute a consent to transfer agreement, outlining the conditions that must be met to secure Beem Light Sauna's approval for the transfer.
However, there are exceptions to this rule. For transfers that do not result in a control transfer, some conditions may be waived by Beem Light Sauna. Additionally, the franchisor will consent to the assignment of the agreement to an entity formed for ownership convenience, provided certain conditions are met, such as the entity's sole business being the operation of the studio and the original owners maintaining their equity interests in the new entity. These permitted transfers do not require Beem Light Sauna's right of first refusal or approval.
Overall, while Beem Light Sauna maintains significant control over franchise transfers, there are mechanisms in place to allow for certain types of transfers under specific conditions, providing some flexibility for franchisees while protecting the franchisor's interests.