If the Development Agreement with Beem Light Sauna is terminated, will the Development Fee be refunded?
Beem_Light_Sauna Franchise · 2025 FDDAnswer from 2025 FDD Document
r other agreement executed with us or our Affiliates (a "Related Agreement") and we or our Affiliates (i) terminate such Related Agreement or (ii) have the right to terminate such Related Agreement, even if we do not exercise such termination right; or
- (d) You, your Owners, or your Affiliates breach or otherwise fail to comply fully with any other provision contained in this Agreement, including Section 8 (Noncompete Covenants).
6.2 Our Remedies.
- (a) Termination. If any Event of Default occurs under Section 6.1, we may, at our sole election, declare this Agreement and any and all other rights granted to you, and restrictions imposed on us, under this Agreement to be immediately terminated and of no further force or effect. Upon termination of this Agreement for any other reason whatsoever, we will retain the Development Fee and you will not be relieved of any of your obligations, debts, or liabilities hereunder, including, without limitation, any debts, obligations, or liabilities which have accrued prior to such termination.
Source: Item 23 — RECEIPT (FDD pages 71–230)
What This Means (2025 FDD)
According to the 2025 Beem Light Sauna Franchise Disclosure Document, the Development Fee is generally non-refundable. Specifically, upon termination of the Development Agreement for any reason, Beem Light Sauna will retain the Development Fee. The franchisee will not be relieved of any obligations, debts, or liabilities, including those accrued before the termination.
Beem Light Sauna may also choose to modify the Development Area or Development Schedule if an Event of Default occurs, decreasing the number of Studios required to be developed. If Beem Light Sauna reduces the Development Area or Schedule due to an Event of Default, they are not obligated to refund any portion of the Development Fee.
This non-refundability clause means that a prospective Beem Light Sauna developer risks losing the entire Development Fee if they cannot fulfill their development obligations, or if the agreement is terminated for other reasons. This is a significant financial risk that potential developers should carefully consider. It is important to understand the conditions under which Beem Light Sauna can terminate the agreement and what constitutes an Event of Default.
Franchisees should seek legal counsel to fully understand the implications of this clause and to negotiate terms that may provide some protection for their investment. Common industry practice varies, with some franchisors offering partial refunds under specific circumstances, so this is an important point to clarify during due diligence.