Is a Beem Light Sauna franchisee required to pay a franchise fee for subsequent studios?
Beem_Light_Sauna Franchise · 2025 FDDAnswer from 2025 FDD Document
direct ownership interests in such Affiliated Entity; (b) the Affiliated Entity conducts no business other than the operation of one or more of the Studios; (c) we determine, in our sole discretion, the Affiliated Entity and all owners of a legal or beneficial ownership interest in the Affiliated Entity meet our then-current criteria for franchisees and franchisee owners; and (d) in addition to the guarantee requirements set forth in the applicable Franchise Agreement, you and all of your Owners sign a personal guarantee and agree to assume full and unconditional liability for, and agree to perform, all obligations, covenants and agreements contained in the Franchise Agreement.
2. Fees.
- 2.1 Franchise Fee. For each Studio that you develop pursuant to this Agreement, the initial franchise fee due under the applicable Franchise Agreement (the "Franchise Fee") for such Studio will be specified in Appendix A.
- 2.2 Development Fee. Upon execution of this Agreement, you must pay us a development fee in the amount specified on Appendix A (the "Development Fee"), which will be equal to 100% of the aggregate of all of the Franchise Fees due for the Studios that you commit to develop under this Agreement.
- 2.3 Application of Fee and Non-refundability. The Development Fee will be credited towards the Franchise Fee due for each Studio that you develop pursuant to this Agreement. Thus, there shall be no additional Franchise Fee due under each Franchise Agreement signed pursuant to this Development Agreement. The Development Fee is fully earned by us when we and you sign this Agreement and is non-refundable, even if you do not develop Studios in accordance with the Development Schedule.
3. Development Obligations.
3.1 Development of Studios.
- (a) Initial Studio.
Source: Item 23 — RECEIPT (FDD pages 71–230)
What This Means (2025 FDD)
According to the 2025 Beem Light Sauna Franchise Disclosure Document, franchisees who sign a Development Agreement are not required to pay an additional franchise fee for subsequent studios. The Development Agreement requires the franchisee to pay a Development Fee upfront, which is equal to the total of all franchise fees for the studios they commit to develop. This Development Fee is then credited towards the franchise fee for each subsequent studio, meaning no additional franchise fee is due when each individual Franchise Agreement is signed under the Development Agreement.
However, the FDD states that for each additional studio a franchisee has the right to develop, they must sign Beem Light Sauna's then-current Franchise Agreement. This agreement may have materially different terms than the initial agreement, including different fees, although no additional franchise fee will be owed under such agreement due to the Development Fee already paid. This implies that while the initial franchise fee is covered by the Development Agreement, other fees or terms could change in subsequent franchise agreements.
It is important to note that the Development Fee is fully earned by Beem Light Sauna upon signing the Development Agreement and is non-refundable. This means that even if the franchisee does not develop all the studios outlined in the Development Schedule, they will not receive a refund of any portion of the Development Fee. Prospective Beem Light Sauna franchisees should carefully consider the Development Schedule and their ability to meet the development obligations before entering into a Development Agreement.