What section of the Beem Light Sauna franchise agreement covers Noncompete Covenants?
Beem_Light_Sauna Franchise · 2025 FDDAnswer from 2025 FDD Document
8. Noncompete Covenants.
Section 12 (Noncompete Covenants) of the Initial Franchise Agreement is hereby incorporated by reference and shall apply under this Agreement to you and your Owners, except the post-term noncompete covenant in Section 12.2 (After Termination, Expiration, or Transfer) of the Initial Franchise Agreement shall apply to any Competitive Business that is located within (i) the Development Area, (ii) a 10-mile radius of the Development Area, or (iii) a 10-mile radius of the location of any other Studio that is operating or under development at the time of such expiration, termination, or transfer. The Owners must personally bind themselves to this Section 8 by signing our current form of Payment and Performance Guarantee, which is attached as Appendix B to this Agreement.
Source: Item 23 — RECEIPT (FDD pages 71–230)
What This Means (2025 FDD)
According to Beem Light Sauna's 2025 Franchise Disclosure Document, Section 12 of the Initial Franchise Agreement outlines the noncompete covenants. For franchisees entering into a Development Agreement, Section 8 of that agreement addresses noncompete covenants.
The noncompete covenants in Section 12 apply to the franchisee and their owners. However, the post-term noncompete specifically applies to any Competitive Business within the Development Area, a 10-mile radius of the Development Area, or a 10-mile radius of any other operating or developing Studio at the time of expiration, termination, or transfer.
Owners are required to personally agree to Section 8 by signing the Payment and Performance Guarantee, which is attached as Appendix B to the Development Agreement. This ensures that the noncompete obligations are binding on the individual owners as well as the franchisee entity. The guarantors also agree to personally comply with Section 8 of the Development Agreement, including both in-term and post-term noncompetes, as if they were the franchisee.