Under what circumstances does Beem Light Sauna's right of first refusal not apply to a transfer?
Beem_Light_Sauna Franchise · 2025 FDDAnswer from 2025 FDD Document
However, our right of first refusal will not apply with regard to Transfers to an Entity under Section 13.7 (Permitted Transfers) or 13.8 (Transfer Upon Death, Incapacity, or Bankruptcy) or Transfers to your spouse, son, or daughter.
- 13.7 Permitted Transfers.
The other provisions in this Section do not apply, including our right of first refusal and right of approval, to the following Transfers:
- (a) Security Interests.
You may grant, without obtaining our consent, a security interest in the Site (if you own the Site), the Studio, or any Operating Assets to a financial institution or other party that provided or provides any financing for your acquisition, development, and/or operation of the Studio, but you may not grant a security interest in this Agreement.
- (b) Transfer to a Revocable Trust.
Any Owner who is an individual may Transfer his or her ownership interest in you (or any of your Owners that is an Entity) to a revocable trust that he or she establishes for estate planning purposes, as long as he or she (i) is a trustee of the trust, (ii) controls the exercise of the rights in you (or your Owner) held by the trust, and (iii) has the right to revoke the trust.
Source: Item 23 — RECEIPT (FDD pages 71–230)
What This Means (2025 FDD)
According to Beem Light Sauna's 2025 Franchise Disclosure Document, there are specific instances where the franchisor's right of first refusal does not apply to a transfer of ownership. These exceptions are designed to accommodate certain common ownership and estate planning scenarios without requiring Beem Light Sauna's direct intervention.
Specifically, Beem Light Sauna will not exercise its right of first refusal in the event of transfers to an Entity under Section 13.7 (Permitted Transfers) or 13.8 (Transfer Upon Death, Incapacity, or Bankruptcy). Additionally, transfers to the franchisee's spouse, son, or daughter are also exempt from the right of first refusal. This allows for familial transfers of the Beem Light Sauna franchise without the franchisor needing to approve the transfer.
Furthermore, the right of first refusal and right of approval do not apply to the granting of a security interest in the Site, the Studio, or any Operating Assets to a financial institution or other party that provided or provides any financing for your acquisition, development, and/or operation of the Studio, but you may not grant a security interest in this Agreement. Also, the right of first refusal and right of approval do not apply to the transfer of an ownership interest to a revocable trust that an individual Owner establishes for estate planning purposes, provided that the individual is a trustee of the trust, controls the exercise of rights in the franchise, and has the right to revoke the trust. These exceptions provide franchisees with flexibility in managing their business and personal affairs, while still ensuring that Beem Light Sauna maintains control over the brand and quality of its franchise system in most transfer scenarios.