Can Beem Light Sauna charge interest on loans made to the Brand Fund?
Beem_Light_Sauna Franchise · 2025 FDDAnswer from 2025 FDD Document
Brand Fund. We have established and administer a Brand Fund to which you must contribute up to 4% (currently, 2%) of Gross Sales. Under no circumstances will we be deemed a fiduciary with respect to any Brand Fund Fees we receive or administer. We are not required to have an independent audit of the Brand Fund completed, but, if we elect to do so, we may use Brand Fund monies to pay for the audit. We will prepare an unaudited statement of contributions and expenditures for the Brand Fund and make it available within 60 days after the close of our fiscal year to franchisees who make a written request for a copy. If any monies in the Brand Fund remain at the end of a fiscal year, they will carry-over in the Brand Fund into the next fiscal year. We or one of our affiliates may make or otherwise arrange loans to the Brand Fund in any year in which the balance of the Brand Fund is negative and charge a reasonable rate of interest. The amounts loaned to the Brand Fund will be repaid from future contributions to the Brand Fund in the year the loan is made or in subsequent years.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 37–47)
What This Means (2025 FDD)
According to Beem Light Sauna's 2025 Franchise Disclosure Document, Beem Light Sauna or one of its affiliates may provide loans to the Brand Fund if the fund's balance is negative. If Beem Light Sauna or its affiliates loan money to the Brand Fund, they can charge a reasonable rate of interest on the loan.
The Brand Fund is supported by franchisee contributions of up to 4% of Gross Sales, but is currently set at 2%. These contributions are used for advertising, branding, marketing, and promotional activities that benefit the Beem Light Sauna brand and its studios. The Brand Fund is used for costs associated with advertising, branding, marketing, public relations and/or promotional programs and materials, and any other activities Beem Light Sauna determines would benefit the Brand or the Studios generally.
This arrangement ensures that the Brand Fund can continue to operate even when there is a shortfall, allowing Beem Light Sauna to maintain marketing and promotional efforts. The ability to charge interest on these loans provides an incentive for Beem Light Sauna or its affiliates to support the Brand Fund financially during lean periods. The loan amounts, plus interest, are repaid from future contributions to the Brand Fund.