Under what conditions can Beem Light Sauna withhold consent for a transfer?
Beem_Light_Sauna Franchise · 2025 FDDAnswer from 2025 FDD Document
13.3 Transfer Procedure.
(a) Consent Required.
This Agreement and the License are personal to you, and we have granted the License in reliance on your and your Owners' business skill, financial capacity, and personal character.
Accordingly, neither you nor any of the Owners or any successors to any part of your interest in this Agreement or the License may make any Transfer or permit any Transfer to occur without obtaining our prior written consent, except as provided in Section 13.7 (Permitted Transfers).
Any purported Transfer, without our prior written consent, will be null and void and will constitute an Event of Default (as herein defined), for which we may terminate this Agreement without opportunity to cure.
- (b) Obtaining Consent.
If you or any of your Owners desire to make a Transfer, you must promptly provide us with advance written notice and must submit a copy of all proposed contracts and other information concerning the Transfer and transferee that we reasonably require.
We have the right to communicate with both you, your counsel, and the proposed transferee on any aspect of a proposed Transfer.
No Transfer that requires our consent may be completed until at least 60 days after we receive written notice of the proposed Transfer.
We have sole and absolute discretion to withhold our consent, except as otherwise provided in Sections 13.6 (Transfer to an Entity), 13.7 (Permitted Transfers), and 13.8 (Transfer Upon Death, Incapacity, or Bankruptcy), and we may condition our consent on compliance with any conditions that we specify.
If your Studio is not open and operating, we will not consent to your Transfer of this Agreement, and we are under no obligation to do so.
Our consent to a Transfer does not constitute a waiver of any claims that we have against the transferor, nor is it a waiver of our right to demand exact compliance with the terms of this Agreement.
- 13.5 Non-Control Transfers.
For any Transfer that does not result in a Control Transfer, in addition to any other conditions that we reasonably specify, you and/or your transferee must satisfy (unless waived by us) the conditions in Sections 13.4 (Control Transfer),
except the following conditions will not apply: Section 13.4(g) (obtain landlord's consent), 13.4(i) (complete training), 13.4(k) (sign new franchise agreement), and 13.4(l) (renovate Studio). You and your Owners must sign the form of agreement and related documents that we then specify to reflect your new ownership structure.
- 13.6 Transfer to an Entity.
We will consent to the assignment of this Agreement to an Entity that you form for the convenience of ownership, provided that: (i) the Entity has and will have no other business besides operating Studio; (ii) you satisfy the conditions in Sections 13.4(a) (pay the applicable Transfer Fee), 13.4(b) (all payments made), 13.4(c) (comply with obligations), 13.4(d) (sign general release), 13.4(e) (remain liable for pre-Transfer obligations), 13.4(f) (remain bound to certain provisions), and 13.4(j) (sign assignment and guaranty); and (iii) the Owners hold equity interests in the new Entity in the same proportion shown in Appendix A.
Source: Item 23 — RECEIPT (FDD pages 71–230)
What This Means (2025 FDD)
According to the 2025 Beem Light Sauna FDD, Beem Light Sauna has sole and absolute discretion to withhold consent for a transfer of the franchise agreement, except as otherwise provided in Sections 13.6 (Transfer to an Entity), 13.7 (Permitted Transfers), and 13.8 (Transfer Upon Death, Incapacity, or Bankruptcy). Beem Light Sauna may also condition its consent on compliance with any conditions that it specifies. If the Studio is not open and operating, Beem Light Sauna will not consent to the transfer. Any transfer made without Beem Light Sauna's prior written consent will be considered null and void and will constitute an event of default, potentially leading to termination of the agreement without an opportunity to cure.
For a transfer that does not result in a control transfer, the franchisee and/or the transferee must satisfy the conditions in Section 13.4 (Control Transfer), except for a few conditions. The conditions that will not apply are Section 13.4(g) (obtain landlord's consent), 13.4(i) (complete training), 13.4(k) (sign new franchise agreement), and 13.4(l) (renovate Studio). The franchisee and the owners must sign the form of agreement and related documents to reflect the new ownership structure.
Beem Light Sauna will consent to the assignment of the Franchise Agreement to an entity that the franchisee forms for ownership convenience, provided that the entity has no other business besides operating the Studio. The franchisee must satisfy conditions in Sections 13.4(a) (pay the applicable Transfer Fee), 13.4(b) (all payments made), 13.4(c) (comply with obligations), 13.4(d) (sign general release), 13.4(e) (remain liable for pre-Transfer obligations), 13.4(f) (remain bound to certain provisions), and 13.4(j) (sign assignment and guaranty). The owners must hold equity interests in the new entity in the same proportion shown in Appendix A.
These stipulations are typical in franchising, as franchisors want to ensure that any new owner is financially stable, well-trained, and committed to upholding brand standards. Franchisees should carefully consider these transfer conditions, as failing to obtain consent or meet the specified requirements can have significant repercussions, including termination of the franchise agreement.