How does Beem Light Sauna manage the Brand Fund?
Beem_Light_Sauna Franchise · 2025 FDDAnswer from 2025 FDD Document
ational in scope. We may produce the marketing materials inhouse or employ a local, regional, or national advertising agency. We are not obligated to conduct any advertising or marketing programs within your market.
Brand Fund. We have established and administer a Brand Fund to which you must contribute up to 4% (currently, 2%) of Gross Sales. Under no circumstances will we be deemed a fiduciary with respect to any Brand Fund Fees we receive or administer. We are not required to have an independent audit of the Brand Fund completed, but, if we elect to do so, we may use Brand Fund monies to pay for the audit. We will prepare an unaudited statement of contributions and expenditures for the Brand Fund and make it available within 60 days after the close of our fiscal year to franchisees who make a written request for a copy. If any monies in the Brand Fund remain at the end of a fiscal year, they will carry-over in the Brand Fund into the next fiscal year. We or one of our affiliates may make or otherwise arrange loans to the Brand Fund in any year in which the balance of the Brand Fund is negative and charge a reasonable rate of interest. The amounts loaned to the Brand Fund will be repaid from future contributions to the Brand Fund in the year the loan is made or in subsequent years.
We may use monies in the Brand Fund and any earnings on the Brand Fund account for any costs associated with advertising (media and production), branding, marketing, public relations and/or promotional programs and materials, and any other activities we determine, in our sole discretion, would benefit the Brand or the Studios generally. These activities may include, but are not limited to: (i) advertising campaigns in various media; (ii) creation, maintenance, and optimization of the System Website or other websites; (iii) keyword or adword purchasing programs; (iv) conducting and managing social media activities; (v) direct mail advertising; (vi) market research, including secret shoppers and customer satisfaction surveys; (vii) branding studies; (viii) engaging advertising and/or public relations agencies and paying any related retainers and fees; (ix) paying the salaries and benefits of our marketing and brand-building personnel and any other overhead related to our marketing department; (x) purchasing promotional items; (xi) conducting and administering promotions, contests, giveaways, public relations events, and community involvement activities; (xii) marketing the sale of Franchises; (xiii) providing promotional and other marketing materials and services to our franchisees; and (xiv) reasonable administrative costs and overhead we incur related to the administration of the Brand Fund and the implementation of Brand Fund-supported programs.
We may consult with, in our sole discretion, a franchisee advisory council selected by franchisees or a committee of franchisees that we appoint regarding marketing programs.
However, we have the right to direct all marketing programs and uses of the Brand Fund, with the final decision over creative concepts, materials, and media used in the programs and their placement.
We do not guarantee that you will benefit from the Brand Fund in proportion to your contributions to the Brand Fund.
We will make any sales and other materials produced with Brand Fund monies available to you without charge or at a reasonable cost, and we will deposit the proceeds of such sales into the Brand Fund.
In fiscal year 2024, Brand Fund expenditures by Predecessor were allocated as follows: 25.78% on production ; 13.61% on media placement; 60.61% administrative expenses.
If we or our affiliates operate any Studios, we or our affiliates will contribute to the Brand Fund a percentage of the receipts of those Studios, on the same basis as required for franchisees. If we reduce the Brand Fund contribution rate for franchisees, we will reduce the contribution rate for company or affiliate-owned Studios by the same amount. Our other franchisees may not be required to contribute to the Brand Fund, may be required to contribute to the Brand Fund at a different rate than you, or may be required to contribute to a different Brand Fund.
Local Marketing. You must participate in such advertising, promotional, and community outreach programs that we may specify periodically, at your own expense. You must use your best efforts to promote the use of the Marks in your Territory.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 37–47)
What This Means (2025 FDD)
According to Beem Light Sauna's 2025 Franchise Disclosure Document, the Brand Fund is established and administered by the franchisor, with franchisees required to contribute up to 4% of Gross Sales; currently, the contribution is 2%. Beem Light Sauna retains full authority over the Brand Fund's use and direction of marketing programs. While they may consult with a franchisee advisory council or committee, the final say on creative concepts, materials, and media rests with Beem Light Sauna. Franchisees are not guaranteed benefits proportional to their contributions. Any sales materials produced with Brand Fund monies will be made available to franchisees at no charge or at a reasonable cost, with proceeds deposited back into the Brand Fund.
Beem Light Sauna is not considered a fiduciary regarding Brand Fund Fees and is not obligated to conduct independent audits, though they may elect to do so using Brand Fund monies. The franchisor will provide an unaudited statement of contributions and expenditures within 60 days after the fiscal year's close to franchisees who request it in writing. Surplus funds at year-end will carry over to the next fiscal year. The franchisor or its affiliates can loan money to the Brand Fund if the balance is negative, charging a reasonable interest rate, with repayment from future contributions.
In 2024, the Brand Fund expenditures were allocated with 25.78% spent on production, 13.61% on media placement, and 60.61% on administrative expenses. Beem Light Sauna also requires franchisees to spend a minimum of $1,500 per month on local advertising and promotional activities, in addition to the Brand Fund fee. Franchisees must obtain written approval from Beem Light Sauna before using any advertising or marketing materials with the brand's marks. If a franchisee fails to meet the local marketing spending requirement, Beem Light Sauna can require them to pay the shortfall as an additional Brand Fund Fee or for Beem Light Sauna to use on local marketing for the franchisee's studio.
Prospective franchisees should note that a significant portion of the Brand Fund has been allocated to administrative expenses. They should also be aware that Beem Light Sauna retains ultimate control over the fund's usage, and there is no guarantee that a franchisee will directly benefit from the fund in proportion to their contribution. The franchisee is also obligated to a monthly local marketing spend, and failure to comply allows Beem Light Sauna to mandate that the franchisee remit the unspent funds to them.