Can Beem Light Sauna use Brand Fund monies for reasonable administrative costs?
Beem_Light_Sauna Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
We may use monies in the Brand Fund and any earnings on the Brand Fund account for any costs associated with advertising (media and production), branding, marketing, public relations and/or promotional programs and materials, and any other activities we determine, in our sole discretion, would benefit the Brand or the Studios generally. These activities may include, but are not limited to: (i) advertising campaigns in various media; (ii) creation, maintenance, and optimization of the System Website or other websites; (iii) keyword or adword purchasing programs; (iv) conducting and managing social media activities; (v) direct mail advertising; (vi) market research, including secret shoppers and customer satisfaction surveys; (vii) branding studies; (viii) engaging advertising and/or public relations agencies and paying any related retainers and fees; (ix) paying the salaries and benefits of our marketing and brand-building personnel and any other overhead related to our marketing department; (x) purchasing promotional items; (xi) conducting and administering promotions, contests, giveaways, public relations events, and community involvement activities; (xii) marketing the sale of Franchises; (xiii) providing promotional and other marketing materials and services to our franchisees; and (xiv) reasonable administrative costs and overhead we incur related to the administration of the Brand Fund and the implementation of Brand Fund-supported programs.
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, the Brand Fund can be used for reasonable administrative costs. Specifically, Beem Light Sauna may use the Brand Fund for costs associated with advertising, branding, marketing, public relations, promotional programs, and other activities that benefit the brand or studios. This includes reasonable administrative costs and overhead related to the administration of the Brand Fund and the implementation of Brand Fund-supported programs.
For a prospective franchisee, this means that a portion of their contribution to the Brand Fund, which is up to 4% (currently 2%) of Gross Sales, may be used by Beem Light Sauna to cover the administrative expenses associated with managing the fund itself. This is a fairly standard practice in franchising, as managing a brand fund involves costs such as personnel, accounting, and legal compliance.
It is important to note that in fiscal year 2024, 60.61% of the Brand Fund expenditures by the Predecessor were allocated to administrative expenses. While this figure provides some historical context, it's important to recognize that Beem Light Sauna has the sole discretion to determine how the Brand Fund is used, and future allocations may differ. Franchisees should be aware that they do not have a direct say in how the Brand Fund is spent, although Beem Light Sauna may consult with a franchisee advisory council.