Under what circumstances does Beem Light Sauna have the option to purchase the assets of my studio?
Beem_Light_Sauna Franchise · 2025 FDDAnswer from 2025 FDD Document
(a) Exercise of Option. Upon termination of this Agreement for any reason (other than your termination in accordance with Section 14.3 (Termination By You)) or expiration of this Agreement without our and your signing a successor franchise agreement, we have the option to purchase the inventory, supplies, Operating Assets, and other assets used in the operation of the Studio that we designate (the "Purchased Assets"). As a first step in exercising our option, we must give you written notice within 15 days after the date of termination or expiration of our intent to conduct due diligence (the "Exercise Notice"). We have the unrestricted right to exclude any assets we specify relating to the Studio from the Purchased Assets and not acquire them. You agree to provide us the financial statements and other information we reasonably require, and to allow us to inspect the Studio and its assets, to determine whether to exercise our option. If a Franchisee Party owns the Site, we may elect to include a fee simple interest in the Site as part of the Purchased Assets or, at our option, lease the Site from the Franchisee Party (or an Entity controlled by your Owner) for an initial ten-year term with one renewal term of five years (at our option) on commercially reasonable terms, which shall include the right to sublease the Site to another party. You and your Owners agree to cause your Affiliate or any Entity controlled by such Owner to comply with these requirements. If a
Franchisee Party leases the Site from an unaffiliated lessor, you agree (at our option) to cause the Franchisee Party to assign the Site Lease to us or to enter into a sublease for the remainder of the Site Lease term on the same terms (including renewal options) as the Lease.
Source: Item 23 — RECEIPT (FDD pages 71–230)
What This Means (2025 FDD)
According to Beem Light Sauna's 2025 Franchise Disclosure Document, Beem Light Sauna has the option to purchase the assets of your studio under specific conditions related to the termination or expiration of the franchise agreement. Specifically, if the franchise agreement is terminated for any reason other than the franchisee terminating it according to Section 14.3, or if the agreement expires without a successor agreement being signed by both parties, Beem Light Sauna can exercise its option to purchase designated assets.
To exercise this option, Beem Light Sauna must provide written notice within 15 days of the termination or expiration date, indicating their intent to conduct due diligence. Beem Light Sauna has the right to exclude any assets related to the studio from the purchase. The franchisee is obligated to provide financial statements and allow inspections of the studio and its assets to facilitate Beem Light Sauna's decision-making process. This includes the possibility of Beem Light Sauna purchasing or leasing the site where the studio is located.
If Beem Light Sauna decides not to operate the studio themselves, they may require the franchisee to continue operating it under the terms of the existing agreement until Beem Light Sauna either declines to exercise their purchase option or the purchase is completed. This ensures continued operation during the transition period. Understanding these conditions is crucial for prospective franchisees as it outlines the circumstances under which Beem Light Sauna may acquire the studio's assets, impacting the franchisee's exit strategy and potential financial outcomes.