Is the Designated Manager of a Beem Light Sauna required to have an ownership interest in the entity?
Beem_Light_Sauna Franchise · 2025 FDDAnswer from 2025 FDD Document
Your Operating Principal must have at least a 10% ownership interest in your Entity and must have authority over all business decisions related to your Studio and must have the power to bind you in all dealings with us. In addition, you must appoint a Designated Manager to manage the day-to-day business of your Studio, who may also be the Operating Principal. The Designated Manager is not required to have an ownership interest in your Entity. You must provide us with written notice of your Operating Principal and Designated Manager at least 60 days prior to opening and may not change your Operating Principal and Designated Manager without our prior approval.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 53–54)
What This Means (2025 FDD)
According to Beem Light Sauna's 2025 Franchise Disclosure Document, the Designated Manager is not required to have an ownership interest in the franchise entity. However, the Operating Principal, who has authority over all business decisions, must have at least a 10% ownership interest in the entity. The Designated Manager is responsible for the day-to-day business operations of the Beem Light Sauna studio and may also be the Operating Principal.
This distinction provides flexibility for franchisees who may want to hire a manager without offering equity. It also ensures that someone with a significant financial stake (at least 10%) is in charge of major business decisions. Beem Light Sauna requires written notice of both the Operating Principal and Designated Manager at least 60 days before opening, and any changes to these roles require prior approval from Beem Light Sauna.
Beem Light Sauna retains the right to require non-disclosure and non-compete agreements from Designated Managers, officers, directors, instructors and even the owners' spouses. These agreements protect Beem Light Sauna's interests and confidential information. The Payment and Performance Guarantee must be signed by each Owner, including the Operating Principal, and his/her spouse (as applicable), binding them to the obligations of the Franchise Agreement.