What ownership interest must the Operating Principal have in the Beem Light Sauna franchise entity?
Beem_Light_Sauna Franchise · 2025 FDDAnswer from 2025 FDD Document
Your Operating Principal must have at least a 10% ownership interest in your Entity and must have authority over all business decisions related to your Studio and must have the power to bind you in all dealings with us. In addition, you must appoint a Designated Manager to manage the day-to-day business of your Studio, who may also be the Operating Principal. The Designated Manager is not required to have an ownership interest in your Entity. You must provide us with written notice of your Operating Principal and Designated Manager at least 60 days prior to opening and may not change your Operating Principal and Designated Manager without our prior approval.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 53–54)
What This Means (2025 FDD)
According to Beem Light Sauna's 2025 Franchise Disclosure Document, the Operating Principal of a franchise entity must maintain a minimum ownership stake. Specifically, the Operating Principal is required to have at least a 10% ownership interest in the franchise entity.
This requirement ensures that the Operating Principal is sufficiently invested in the success of the Beem Light Sauna studio. Furthermore, the Operating Principal must have the authority to make all business decisions related to the studio and be able to legally bind the franchisee in dealings with Beem Light Sauna. This demonstrates the importance of the Operating Principal's role in managing the franchise and acting as a key point of contact with the franchisor.
In addition to the ownership requirement, Beem Light Sauna also requires the franchisee to appoint a Designated Manager to handle the day-to-day operations of the studio. The Operating Principal and Designated Manager can be the same person. However, the Designated Manager is not required to have any ownership interest in the franchise entity. Beem Light Sauna must receive written notice of both the Operating Principal and Designated Manager appointments at least 60 days before the studio opens, and any changes to these roles require prior approval from Beem Light Sauna.