What happens if a Beem Light Sauna franchisee violates the noncompete covenants?
Beem_Light_Sauna Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Noncompete Covenant. Each of the Guarantors agrees to personally comply with, and personally be liable for the breach of, all of the provisions of Section 8 (Noncompete Covenants) of the Development Agreement, including both the in-term and postterm noncompete, as though each such Guarantor were the "Franchisee" named in the Development Agreement.
Source: Item 23 — RECEIPT (FDD pages 71–230)
What This Means (2025 FDD)
According to the 2025 Beem Light Sauna Franchise Disclosure Document, the guarantors of the franchise agreement must personally comply with the noncompete covenants outlined in Section 8 of the Development Agreement. This includes both in-term and post-term noncompete obligations.
If the noncompete covenants are breached, the guarantors are personally liable as if they were the franchisee named in the Development Agreement. This means that the guarantors, who have signed a Payment and Performance Guarantee, are directly responsible for ensuring compliance with the noncompete terms.
This arrangement ensures that Beem Light Sauna has recourse against individuals who have a vested interest in the franchisee's compliance, adding an extra layer of security for the franchisor. Prospective franchisees should carefully review Section 8 of the Development Agreement and understand the implications of the noncompete covenants for themselves and their guarantors.