Under the Beem Light Sauna franchise agreement, what constitutes an 'Event of Default'?
Beem_Light_Sauna Franchise · 2025 FDDAnswer from 2025 FDD Document
The Transfer is conditional upon our determination that the Transfer was on terms substantially the same as those offered to us.
Section 14 Termination and Default.
- 14.1 Events of Default. Any one or more of the following constitutes an "Event of Default" under this Agreement:
- (a) You or any Owner make or have made any material misrepresentations or omissions in connection with your application to us for the franchise, this Agreement, or any related documents, or you submit to us any report or statement that you know or should know to be false or misleading;
- (b) Your Required Trainees fail to successfully complete Initial Training to our satisfaction at least 30 days before the earlier of the date you open the Studio or the Opening Deadline (or by such earlier deadline that we specify);
(c) You fail to sign a Site Lease or purchase agreement that we have approved for a site that we have accepted by the Site Acquisition Deadline;
(d) You fail to open for business by the Opening Deadline;
(e) You fail to make changes to the Site and the Studio as required in Section 6.5(b) (Renovations) within the applicable time periods;
(f) You fail to maintain possession of the Site and fail to secure our approval of and enter into a lease for a new, accepted Site within 90 days after the expiration or termination of the Site Lease;
(g) You voluntarily suspend operation of the Studio without our prior written consent for three or more consecutive business days on which you were required to operate, unless we determine, in our sole discretion, that the failure was beyond your control;
(h) After multiple attempts to reach you via telephone, e-mail, or other written correspondence, you fail to communicate with us within seven days after we send you a written communication in accordance with Section 17.11 (Notices) notifying you of our attempts to reach you and our need to receive a response from you.
(i) You fail to meet Minimum Sales Levels for two consecutive calendar years;
Source: Item 23 — RECEIPT (FDD pages 71–230)
What This Means (2025 FDD)
According to the 2025 Beem Light Sauna Franchise Disclosure Document, several actions or failures can trigger an 'Event of Default' under the franchise agreement. These events allow Beem Light Sauna to take certain actions, including terminating the agreement.
Specifically, an Event of Default occurs if a franchisee or any owner makes material misrepresentations or omissions in their franchise application or related documents, or submits false or misleading reports. Failing to have required trainees successfully complete initial training to Beem Light Sauna's satisfaction at least 30 days before the studio opens (or an earlier specified deadline) also constitutes default. Additional events include failing to sign an approved site lease or purchase agreement by the Site Acquisition Deadline, failing to open for business by the Opening Deadline, or not making required site and studio renovations within the specified time.
Further, an Event of Default can occur if a franchisee fails to maintain possession of the site and secure approval for a new lease within 90 days after the original lease expires or terminates. Voluntarily suspending studio operations without prior written consent for three or more consecutive business days, when operations were required, also constitutes default, unless Beem Light Sauna determines the failure was beyond the franchisee's control. Finally, failing to communicate with Beem Light Sauna within seven days after receiving written notification of their attempts to reach the franchisee, or failing to meet Minimum Sales Levels for two consecutive calendar years, are also Events of Default.
These stipulations are typical in franchise agreements, designed to protect the franchisor's brand and ensure consistent standards across all franchise locations. Prospective Beem Light Sauna franchisees should carefully review these conditions to understand their obligations and the potential consequences of non-compliance.