Under what conditions can Beem Light Sauna terminate the Development Agreement?
Beem_Light_Sauna Franchise · 2025 FDDAnswer from 2025 FDD Document
6.2 Our Remedies.
- (a) Termination. If any Event of Default occurs under Section 6.1, we may, at our sole election, declare this Agreement and any and all other rights granted to you, and restrictions imposed on us, under this Agreement to be immediately terminated and of no further force or effect. Upon termination of this Agreement for any other reason whatsoever, we will retain the Development Fee and you will not be relieved of any of your obligations, debts, or liabilities hereunder, including, without limitation, any debts, obligations, or liabilities which have accrued prior to such termination. Your failure to open and thereafter operate Studios in accordance with the Development Schedule will not, in itself, constitute cause for us to terminate any previously-executed Franchise Agreement.
- (b) Other Remedies. If any Event of Default occurs under Section 6.1, in lieu of termination, we may at our option, and in our discretion, unilaterally modify the Development Area and/or modify the Development Schedule to decrease the number of
Source: Item 23 — RECEIPT (FDD pages 71–230)
What This Means (2025 FDD)
According to the 2025 Beem Light Sauna Franchise Disclosure Document, Beem Light Sauna has the right to terminate the Development Agreement if any Event of Default occurs as defined in Section 6.1 of the agreement. Upon termination, Beem Light Sauna will retain the Development Fee, and the franchisee will still be responsible for any outstanding obligations or liabilities, including those that accrued before the termination. However, the franchisee's failure to adhere to the Development Schedule by not opening and operating Studios will not automatically lead to the termination of any previously executed Franchise Agreement.
Instead of terminating the agreement, Beem Light Sauna has the option to modify the Development Area or the Development Schedule. This could involve decreasing the number of Studios the franchisee is required to develop. Beem Light Sauna will notify the franchisee in writing about these modifications, which will take effect immediately upon the franchisee receiving the notice.
If Beem Light Sauna reduces the Development Area or Schedule due to an Event of Default, the franchisee will not receive a refund for any portion of the Development Fee. This means that even if the franchisee is no longer required to develop as many studios, they will not get back any of the initial fee paid to secure the development rights. This is a significant risk for the franchisee, as they could lose their development rights and initial investment if they fail to meet the franchisor's requirements.