What happened to the Affiliate-Owned Studios after Beem Light Sauna acquired the franchise system?
Beem_Light_Sauna Franchise · 2025 FDDAnswer from 2025 FDD Document
As we acquired the franchise system in January 2025, Predecessor was the franchisor for fiscal years 2022, 2023, and 2024. In that period, Predecessor's affiliates owned and operated Studios, which we have categorized as "Affiliate-Owned Studios" in this Item 20. After our acquisition of the system, those Affiliate-Owned Studios became Franchised Studios operated under an arms-length agreement with us.
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 66–70)
What This Means (2025 FDD)
According to Beem Light Sauna's 2025 Franchise Disclosure Document, the franchise system was acquired in January 2025. Prior to the acquisition, the predecessor company operated studios categorized as "Affiliate-Owned Studios." After Beem Light Sauna acquired the franchise system, these Affiliate-Owned Studios transitioned into Franchised Studios.
This transition means that the previously company-operated locations became franchises, operating under agreements with Beem Light Sauna. These agreements are considered "arms-length," suggesting they are negotiated as if the parties were independent, ensuring fair terms for both Beem Light Sauna and the new franchisees.
For a potential franchisee, this indicates that Beem Light Sauna is shifting away from company-owned operations and focusing on franchise-based growth. This could mean more support and resources are directed towards franchisees. However, it's important to understand the terms of the franchise agreement and how they compare to the terms under which the Affiliate-Owned Studios were previously run to fully assess the impact of this change.