What rate of interest can Beem Light Sauna 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.
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, Beem Light Sauna or one of its affiliates may make loans to the Brand Fund in any year in which the balance of the Brand Fund is negative. If Beem Light Sauna or its affiliates do provide a loan to the Brand Fund, they can charge a reasonable rate of interest.
This means that if the Brand Fund, which is funded by franchisee contributions of up to 4% of gross sales (currently 2%), runs a deficit, Beem Light Sauna has the option to provide financial assistance. This protects the Brand Fund from running out of money.
However, the FDD does not specify what constitutes a "reasonable rate of interest." As a prospective franchisee, it would be prudent to discuss with Beem Light Sauna what interest rate they would charge on such loans, how that rate is determined, and under what circumstances the Brand Fund might require a loan. Understanding these details will help a franchisee better assess the financial management and stability of the Brand Fund.