Is the Development Fee for a Beem Light Sauna franchise refundable?
Beem_Light_Sauna Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Expenditure | Low Estimate | High Estimate | Method of Payment | When Due | To Whom Payment Is Made |
|---|---|---|---|---|---|
| Development Fee (1) | $165,000 | $350,000 | Lump sum | When you sign Development Agreement | Us |
| Estimated Initial Investment for First Studio (2) | $327,047 | $601,947 | As incurred | As incurred | Us and third parties |
| TOTAL (3) | $492,047 | $951,947 |
Notes:
-
- Development Fee. Upon signing the Development Agreement, you must pay us the Development Fee. The Development Fee varies based on the number of Studios you commit to develop. The low estimate is based on a commitment to develop three Studios (in which case the Franchise Fee under each Franchise Agreement would be $55,000 per studio) and the high estimate is based on a commitment to develop 10 Studios (in which case the Franchise Fee under each Franchise Agreement would be $35,000 per studio). The Development Fee will be credited tow
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 26–31)
What This Means (2025 FDD)
According to Beem Light Sauna's 2025 Franchise Disclosure Document, the Development Fee is not refundable. The Development Fee is paid upon signing the Development Agreement and varies depending on the number of studios the franchisee commits to develop. The low estimate for the Development Fee is $165,000, based on a commitment to develop three studios, while the high estimate is $350,000, for a commitment to develop ten studios.
Although the Development Fee is not refundable, it is credited towards the initial Franchise Fee for each studio developed under the Development Agreement. For example, if a franchisee commits to developing three studios, the Franchise Fee under each Franchise Agreement would be $55,000 per studio. If a franchisee commits to developing ten studios, the Franchise Fee under each Franchise Agreement would be $35,000 per studio.
Prospective franchisees should carefully consider the number of studios they plan to develop before signing a Development Agreement, as the Development Fee is non-refundable. This is a common practice in franchising, as the franchisor incurs costs in evaluating and approving the franchisee's application and granting them development rights.