Does Beem Light Sauna guarantee a franchisee's promissory note?
Beem_Light_Sauna Franchise · 2025 FDDAnswer from 2025 FDD Document
ITEM 1 THE FRANCHISOR, AND ANY PARENTS, PREDECESSORS, AND AFFILIATES*
General. To simplify the language in this Disclosure Document, "we" or "us" means Beem Franchisor LLC, the franchisor. "You" or "Franchisee" means the person or entity who buys the franchise, including all equity owners of a corporation, general partnership, limited partnership, limited liability, or any other type of entity (an "Entity"). If you are an Entity, each individual or Entity that has a legal or beneficial interest in you will be referred to as an "Owner." Your Owners and their spouses (as applicable) must sign the Payment and Performance Guarantee attached to the Franchise Agreement, the current form of which is attached to this Disclosure Document as Exhibit A (the "Franchise Agreement"), which means that all of the provisions of the Franchise Agreement will also apply to your Owners and their spouses (as applicable).
We are a limited liability company formed in Delaware on December 30, 2024. We do business under the beem® Light Sauna name (the "Brand"). Our principal business address is 4000 MacArthur Blvd., Suite 800, Newport Beach, California 92660. If we have an agent for service of process in your state, we disclose that agent in Exhibit D.
We became the franchisor of beem® Light Sauna studios ("Studios") on January 31, 2025. We have never operated a Studio. Although we reserve the right to do so, we have not offered franchises in other lines of business. We have no business activities other than those described in this Item 1.
Predecessor. Our predecessor, Get Lit Concepts, LLC, a North Carolina limited liability company ("Predecessor"), was incorporated on April 30, 2021. Predecessor was the franchisor of Studios from March 2022 to January 30, 2025. Predecessor's principal business address is 7131 W. Ray Road #38, Chandler, Arizona 85226. Predecessor has never offered franchises in other lines of business, nor has it ever operated a Studio, although its affiliates operated Studios from February 2022 to January 30, 2025. Under the terms of an asset purchase agreement dated as of January 31, 2025, we acquired from Predecessor and its owners substantially all of the assets relating to or used for the operation of Studios, including all right, title, and interest in and to the Marks and the System (each as defined below). We are not affiliated with Predecessor.
Parent and Certain Affiliates. We are a wholly-owned subsidiary of Sequel Brands, LLC, a Delaware limited liability company ("Sequel"). Sequel shares our principal business address.
We are affiliated with Sequel Brands Holdings LLC, a Delaware limited liability company ("Sequel Holdings"), which was formed on April 8, 2025. Sequel is the direct parent company to Sequel Holdings. Sequel Holdings guarantees our performance under our franchise agreements. Sequel Holdings shares our principal business address.
Source: Item 10 — FINANCING (FDD page 37)
What This Means (2025 FDD)
According to Beem Light Sauna's 2025 Franchise Disclosure Document, the franchisor, Beem Franchisor LLC, does not guarantee a franchisee's promissory note. However, the franchisee's owners and their spouses must sign a Payment and Performance Guarantee, which is attached to the Franchise Agreement as Exhibit A. This means that the owners and their spouses are guaranteeing the franchisee's obligations under the Franchise Agreement.
Appendix C of the Franchise Agreement outlines the Payment and Performance Guarantee. The Guarantors (owners and their spouses) jointly and severally unconditionally guarantee to Beem Franchisor LLC the payment and performance when due of all obligations, indebtedness, and liabilities of the Franchisee to the Franchisor. This includes all direct or indirect, absolute or contingent liabilities, whether existing now or incurred in the future, and any extensions, renewals, or modifications to these liabilities.
The Guarantors also agree to cover all expenses, including reasonable attorney's fees, incurred while enforcing the Guarantee or securing payment of any Guaranteed Liabilities. The FDD states that the Guarantors represent that they have reviewed a copy of the Franchise Agreement and had the opportunity to consult with counsel to understand the implications of the Franchise Agreement and the Guarantee.
In practical terms, this means that if a Beem Light Sauna franchisee fails to meet their financial or performance obligations to the franchisor, the franchisor can seek recourse from the franchisee's owners and their spouses, who have personally guaranteed these obligations. This is a significant commitment and potential risk for the owners, as their personal assets could be at stake if the franchise does not succeed. Prospective franchisees should carefully review the Franchise Agreement and the Payment and Performance Guarantee with legal counsel to fully understand their obligations and potential liabilities.