What is included in the definition of 'Gross Sales' for a Beem Light Sauna studio?
Beem_Light_Sauna Franchise · 2025 FDDAnswer from 2025 FDD Document
You may not deduct payment provider fees (i.e., bank or credit card company fees and gift card vendor fees) from your Gross Sales calculation.
- 3.3 Brand Fund Fee.
You must contribute weekly an amount that we specify from time to time in our sole discretion, which will not exceed 4% of your Gross Sales (the "Brand Fund Fee") to a fund dedicated to activities we believe would benefit the Brand or the Studios generally (the "Brand Fund").
- 3.4 Technology Fee.
Beginning three months prior to the opening of your Studio, you must pay to us, or a third party that we designate, a technology fee for various technology services that we will provide or arrange for third parties to provide, which services are subject to change over time (a "Technology Fee").
The Technology Fee as of the Effective Date is set forth in Appendix A.
We reserve the right to change the fee by providing you with written notice of any change at least 30 days prior to the implementation of the new fee amount, provided that the Technology Fee will not exceed the greater of $1,200 per month or 2% of your Gross Sales.
We may add, delete, or otherwise modify the products and services that are included in the Technology Fee.
- 6.4 Minimum Sales Levels. During the Term, you must achieve the following minimum sales levels (the "Minimum Sales Levels"):
- (a) average monthly Gross Sales of at least $30,000 in the first full calendar year after the Opening Date; and
- (b) average monthly Gross Sales of at least $40,000 in the second and each subsequent full calendar year after the Opening Date. If you fail to meet the Minimum Sales Levels in any calendar year, you must create a business plan that we must approve in writing and you must diligently implement the business plan during the next calendar year. If you fail to meet the Minimum Sales Levels for two consecutive years, such failure shall be an Event of Default (as defined in Section 14.1 (Events of Default)).
Source: Item 23 — RECEIPT (FDD pages 71–230)
What This Means (2025 FDD)
According to the 2025 Beem Light Sauna FDD, Gross Sales are used to calculate various fees, including the Brand Fund Fee and potentially the Technology Fee. Franchisees must achieve minimum monthly Gross Sales levels to avoid defaulting on the franchise agreement.
The FDD specifies that Gross Sales include all revenue from the operation of the Beem Light Sauna business. This encompasses revenue from memberships, services, products, and any other source. However, the franchisee cannot deduct payment provider fees, such as bank, credit card, or gift card vendor fees, when calculating Gross Sales.
Gross Sales directly impact the franchisee's financial obligations to Beem Light Sauna. For example, the Brand Fund Fee is up to 4% of Gross Sales, and the Technology Fee could reach 2% of Gross Sales if it exceeds $1,200 per month. Furthermore, franchisees must meet minimum average monthly Gross Sales targets of $30,000 in the first year and $40,000 in subsequent years to avoid being in default of their agreement.
Prospective franchisees should carefully consider how the definition of Gross Sales and the associated fees and minimum sales levels will affect their profitability and business planning. Understanding what constitutes Gross Sales is crucial for accurate financial reporting and compliance with the franchise agreement.