Does Beem Light Sauna have the right to approve all transfers by a franchisee?
Beem_Light_Sauna Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise Agreement | Summary | |
|---|---|---|---|
| l. | Our approval of transfer by franchisee | Section 13.3 | We have the right to approve all transfers, except for your grant of a security interest in the Site (if owned by you), the Studio, or any Operating Asset to a party providing financing for your acquisition, development, and/or operation of the Studio. |
| m. | Conditions for our approval of transfer | Sections 13.4 and 13.5 | For a Control Transfer, you pay us pay us the Transfer Fee; all of your monetary obligations to us, our affiliates, and approved suppliers are satisfied; you and your affiliates are not in default of the Franchise Agreement or any Related Agreement; you and your Owners sign a general release; you and your Owners remain liable for obligations incurred or arising prior to transfer; you comply with noncompetition and confidentiality provisions; your landlord consents to the transfer of your lease; proposed transferee agrees to discharge all of your obligations; proposed transferee qualifies, meets training requirements, and signs then-current franchise agreement; proposed transferee upgrades the Studio to our then-current specifications; new franchisee covenants to continue to operate the Studio under the Marks; proposed transferee's owners execute our then-current form of personal guarantee; we determine purchase price acceptable and financing arrangements are subordinate to our interests; and you and your Owners and the proposed transferee and its owners sign our current form of consent to transfer agreement, which states the conditions with which you must comply to secure our consent to the proposed transfer. For any Transfer that does not result in a Control Transfer, in addition to any other conditions that we reasonably specify, you and/or your transferee must satisfy the conditions above, except for the requirements to obtain your landlord's consent, complete training, sign a new franchise agreement, and renovate the Studio. |
| n. | Our right of first refusal to acquire franchisee's business | Section 13.9 | We can match any offer for your Studio, the Studio's assets, or any ownership interest, except for Transfers to an Entity under Section 13.7 of the Franchise Agreement (Permitted Transfers) or 13.8 (Transfer Upon Death, Incapacity, or Bankruptcy). |
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, Beem Light Sauna retains the right to approve all franchise transfers, with a specific exception. This is a common practice in franchising, allowing the franchisor to maintain control over who enters the system and to ensure brand consistency.
The FDD specifies that Beem Light Sauna's approval is required for all transfers, except when a franchisee grants a security interest in the Site (if owned by you), the Studio, or any Operating Asset to a party providing financing for your acquisition, development, and/or operation of the Studio. This means that if a franchisee needs to secure financing to operate their Beem Light Sauna studio, they can use the studio itself as collateral without needing franchisor approval for that specific action.
However, for a standard transfer, the franchisee must meet several conditions to gain approval from Beem Light Sauna. These conditions include paying a transfer fee, satisfying all monetary obligations to Beem Light Sauna and its affiliates, ensuring neither the franchisee nor their affiliates are in default of the Franchise Agreement, and obtaining a general release from the franchisee and their owners. The proposed transferee must also qualify, meet training requirements, and sign the then-current franchise agreement. Furthermore, the studio may need to be upgraded to Beem Light Sauna's current specifications, and the new franchisee must agree to continue operating under the Beem Light Sauna brand. These stipulations are designed to protect the Beem Light Sauna brand and ensure that any new franchisee is well-prepared and financially stable.
Beem Light Sauna also has the right of first refusal to acquire the franchisee's business, allowing them to match any offer for the Studio, its assets, or any ownership interest. This right does not apply to transfers to an Entity under Section 13.7 of the Franchise Agreement (Permitted Transfers) or 13.8 (Transfer Upon Death, Incapacity, or Bankruptcy). This provision gives Beem Light Sauna significant control over who can become a franchisee and ensures they have the option to maintain ownership within the company if a franchisee decides to sell.