What is included in the definition of 'Losses' that a Beem Light Sauna franchisee may be responsible for?
Beem_Light_Sauna Franchise · 2025 FDDAnswer from 2025 FDD Document
Guarantee of Payment and Performance.** The Guarantors jointly and severally unconditionally guarantee to Franchisor and its Affiliates the payment and performance when due, whether by acceleration or otherwise, of all obligations, indebtedness, and liabilities of Franchisee to Franchisor, direct or indirect, absolute or contingent, of every kind and nature, whether now existing or incurred from time to time hereafter, whether incurred pursuant to the Franchise Agreement or otherwise, together with any extension, renewal, or modification thereof in whole or in part (the "Guaranteed Liabilities").
The Guarantors agree that if any of the Guaranteed Liabilities are not so paid or performed by Franchisee when due, the Guarantors will immediately do so.
The Guarantors further agree to pay all expenses (including reasonable attorneys' fees) paid or incurred in endeavoring to enforce this Guarantee or the payment of any Guaranteed Liabilities.
The Guarantors represent and agree that they have each reviewed a copy of the Franchise Agreement and have had the opportunity to consult with counsel to understand the meaning and import of the Franchise Agreement and this Guarantee.
Source: Item 23 — RECEIPT (FDD pages 71–230)
What This Means (2025 FDD)
The 2025 Beem Light Sauna Franchise Disclosure Document includes a Payment and Performance Guarantee. This guarantee stipulates that the Guarantors (those who are guaranteeing the franchisee's obligations) are responsible for the franchisee's obligations, indebtedness, and liabilities to Beem Light Sauna. These responsibilities include both direct and indirect financial obligations, whether absolute or contingent. This covers all liabilities, regardless of whether they currently exist or are incurred in the future. These liabilities can arise from the Franchise Agreement itself or from any other source. The guarantee extends to any modifications or renewals of these obligations.
In practical terms, this means that if a Beem Light Sauna franchisee fails to meet their financial or performance obligations to the franchisor, the guarantors are legally bound to fulfill those obligations. This could include paying outstanding fees, covering debts, or ensuring the franchisee adheres to the terms of the Franchise Agreement. The guarantee is comprehensive, covering a wide range of potential liabilities that the franchisee might incur.
Furthermore, the guarantors are also responsible for covering all expenses, including reasonable attorney's fees, that Beem Light Sauna incurs while trying to enforce the guarantee or recover any Guaranteed Liabilities. This adds another layer of financial responsibility for the guarantors, as they could be liable for legal costs in addition to the original debt or obligation. The FDD emphasizes that the Guarantors should review the Franchise Agreement and consult with counsel to fully understand the implications of the Franchise Agreement and the Guarantee before signing.
This type of guarantee is a common practice in franchising, as it provides the franchisor with an additional layer of security and assurance that the franchisee's obligations will be met. However, it's crucial for potential guarantors to fully understand the scope of the guarantee and the potential financial risks involved before agreeing to it. Prospective Beem Light Sauna franchisees should carefully consider who they choose as guarantors and ensure that those individuals are fully aware of the responsibilities they are undertaking.