What is the minimum 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 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.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 37–47)
What This Means (2025 FDD)
According to the 2025 Beem Light Sauna FDD, Beem Light Sauna or one of its affiliates may make loans 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 minimum interest rate that Beem Light Sauna can charge.
As a prospective franchisee, it's important to understand how the Brand Fund operates and how it's managed. The Brand Fund is supported by franchisee contributions, which are up to 4% of Gross Sales (currently 2%). These funds are used for advertising, marketing, and promotional activities to benefit the Beem Light Sauna brand and studios generally.
Since the FDD does not specify a minimum interest rate, it would be prudent for a prospective franchisee to inquire with Beem Light Sauna about what constitutes a "reasonable rate of interest" in their lending practices to the Brand Fund. Understanding the typical interest rates charged on such loans can provide clarity on potential financial implications for the Brand Fund and, by extension, the franchisees who contribute to it. This information can help franchisees assess the financial stability and management practices associated with the Brand Fund.