Under what conditions can Beem Light Sauna terminate the Development Agreement with cause?
Beem_Light_Sauna Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Development Agreement | Summary | |
|---|---|---|---|
| f. | Termination by us with cause | Section 6.1 | We have the right to terminate Development Agreement if you commit one of several violations. |
| h. | "Cause" defined – non curable defaults | Section 6.1 | Non-curable defaults include you (or your Affiliated Entities) fail to timely execute a Franchise Agreement; you (or your Affiliated Entities) fail to have open and operating the required number of Studios specified in the Development Schedule at any deadline; you, your Owners, or your affiliates breach or commit a default under any Franchise Agreement or other agreement with us or our affiliates, and we or our affiliates terminate that agreement or have the right to terminate that agreement, even if we do not exercise that right; or you, your Owners, or your affiliates breach or otherwise fail to comply with any other provision in the Development Agreement. |
| i. | Your obligations on termination/non-renewal | Section 6.2 | You will lose your right to develop additional studios. |
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 has the right to terminate the Development Agreement if the franchisee commits certain violations, as detailed in Section 6.1 of the Development Agreement. These violations are categorized as non-curable defaults.
Non-curable defaults include failing to timely execute a Franchise Agreement or failing to have the required number of studios open and operating by the deadlines specified in the Development Schedule. Additionally, if the franchisee, their owners, or affiliates breach any Franchise Agreement or other agreement with Beem Light Sauna or its affiliates, giving Beem Light Sauna the right to terminate that agreement (whether or not they actually do so), this also constitutes a non-curable default under the Development Agreement. Finally, any other failure to comply with any provision in the Development Agreement can also result in termination.
Upon termination of the Development Agreement, the franchisee will lose the right to develop additional Beem Light Sauna studios. This highlights the importance of adhering to the Development Schedule and all contractual obligations to maintain the right to expand their Beem Light Sauna business.