From what sources will loans to the Beem Light Sauna Brand Fund be repaid?
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 Beem Light Sauna's 2025 Franchise Disclosure Document, if the Brand Fund has a negative balance, Beem Light Sauna or one of its affiliates may loan money to the fund, charging a reasonable interest rate. These loans will be repaid from future contributions to the Brand Fund.
This means that a portion of the franchisee's contribution to the Brand Fund, which is up to 4% (currently 2%) of gross sales, may be used to repay these loans. The repayment will occur either in the year the loan was made or in subsequent years.
This arrangement ensures the Brand Fund can continue to operate even if it temporarily runs a deficit. However, it also means that a franchisee's contributions might be used to pay off past debts of the fund, rather than exclusively funding current marketing and advertising initiatives. Franchisees should monitor the Brand Fund statements to understand how their contributions are being allocated.