If Beem Light Sauna terminates a franchise agreement, what is the impact on the Development Agreement?
Beem_Light_Sauna Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Development Agreement | Summary | |
|---|---|---|---|
| e. | Termination by us without cause | Not applicable | Not applicable. |
| f. | Termination by us with cause | Section 6.1 | We have the right to terminate Development Agreement if you commit one of several violations. |
| g. | "Cause" defined – curable defaults | None | Not applicable. |
| h. | "Cause" defined – non curable defaults | Section 6.1 | Non-curable defaults include you (or your Affiliated Entities) fail to timely execute a Franchise Agreement; you (or your Affiliated Entities) fail to have open and operating the required number of Studios specified in the Development Schedule at any deadline; you, your Owners, or your affiliates breach or commit a default under any Franchise Agreement or other agreement with us or our affiliates, and we or our affiliates terminate that agreement or have the right to terminate that agreement, even if we do not exercise that right; or you, your Owners, or your affiliates breach or otherwise fail to comply with any other provision in the Development Agreement. |
| i. | Your obligations on termination/non-renewal | Section 6.2 | You will lose your right to develop additional studios. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP (FDD pages 55–62)
What This Means (2025 FDD)
According to Beem Light Sauna's 2025 Franchise Disclosure Document, if a franchisee, their owners, or their affiliates breach or commit a default under any Franchise Agreement with Beem Light Sauna or its affiliates, and Beem Light Sauna or its affiliates terminate that agreement or have the right to terminate that agreement, this constitutes a non-curable default under the Development Agreement.
In such a case, the Development Agreement can be terminated by Beem Light Sauna. If the Development Agreement is terminated, the franchisee will lose their right to develop additional studios.
This means that any issues with the operation of a Beem Light Sauna franchise could jeopardize the franchisee's entire development agreement, preventing them from opening any further locations even if those locations are performing well.