Is there an exception to Beem Light Sauna's right to approve all transfers?
Beem_Light_Sauna Franchise · 2025 FDDAnswer from 2025 FDD Document
act by us | | | | k. | "Transfer" by | Section 13.2 | Includes transfer of any interest in the Franchise Agreement, | | | franchisee – | | the Studio, all or substantially all of the assets related to the | | | definition | | Studio, or you (if you are an Entity). |
| 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; |
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 generally has the right to approve all transfers of a franchise. However, there is an exception regarding security interests.
Specifically, Beem Light Sauna's approval is not required if a franchisee grants a security interest in the Site (if owned by the franchisee), the Studio, or any Operating Asset to a party providing financing for the acquisition, development, and/or operation of the Studio. This exception allows franchisees to obtain financing without needing franchisor approval for the security interest, streamlining the financing process.
This exception is beneficial for franchisees as it provides flexibility in securing financing for their Beem Light Sauna business. It allows them to use their assets as collateral without the need for franchisor approval, which could potentially delay or complicate the financing process. However, franchisees should carefully review the terms of the franchise agreement to fully understand the conditions and implications of this exception.