What is the maximum rate of interest that Beem Light Sauna can charge on loans to the Brand Fund?
Beem_Light_Sauna Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 37–47)
What This Means (2025 FDD)
According to the 2025 FDD, Beem Light Sauna or its affiliates can loan money to the Brand Fund if the fund's balance is negative. If Beem Light Sauna does provide a loan to the Brand Fund, they can charge a reasonable rate of interest.
The FDD does not specify a maximum interest rate that Beem Light Sauna can charge. Instead, it states that the rate must be "reasonable". What constitutes a reasonable rate is not defined in the agreement and could be subject to interpretation.
As a prospective franchisee, it would be prudent to discuss with Beem Light Sauna what interest rate they would consider reasonable for such loans. Understanding the potential interest rate is essential for assessing the financial implications of the Brand Fund's operation and potential shortfalls.