Does the Beem Light Sauna franchise agreement allow for class-wide arbitration?
Beem_Light_Sauna Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) Individual Actions. We and you agree that arbitration will be conducted on an individual, not a class-wide, basis and that an arbitration proceeding between us and you may not be consolidated with any other arbitration proceeding between us and any other person. Notwithstanding the foregoing or anything to the contrary in this Section 16.3, if any court or arbitrator determines that this prohibition on class-wide arbitration is unenforceable with respect to a dispute that otherwise would be subject to arbitration under this Section 16.3, then the parties agree that this arbitration clause shall not apply to that dispute and that such dispute will be resolved in a judicial proceeding in accordance with Section 16.3(d) (Excepted Disputes).
Source: Item 23 — RECEIPT (FDD pages 71–230)
What This Means (2025 FDD)
According to the 2025 Beem Light Sauna Franchise Disclosure Document, the franchise agreement does not allow for class-wide arbitration. Instead, arbitration is to be conducted on an individual basis. This means that any disputes arising between the franchisee and Beem Light Sauna must be handled separately and cannot be combined with disputes involving other franchisees. This clause aims to prevent franchisees from joining together to pursue collective legal action against the franchisor.
However, there is a condition attached to this clause. If a court or arbitrator determines that the prohibition on class-wide arbitration is unenforceable, then the arbitration clause itself will not apply to the dispute. In such cases, the dispute will be resolved in a judicial proceeding. This exception provides a legal recourse if the restriction on class-wide arbitration is deemed invalid under applicable laws.
This arrangement has significant implications for prospective Beem Light Sauna franchisees. On one hand, it prevents franchisees from leveraging the collective power of a class-action lawsuit. On the other hand, it ensures that franchisees retain the right to pursue their claims in court if the arbitration clause is deemed unenforceable. Franchisees should be aware of this provision and understand their rights and options in case of a dispute with Beem Light Sauna.