Can Beem Light Sauna use Brand Fund monies for reasonable overhead?
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.
We may consult with, in our sole discretion, a franchisee advisory council selected by franchisees or a committee of franchisees that we appoint regarding marketing 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 overhead. Specifically, Beem Light Sauna may use the Brand Fund for costs associated with advertising, branding, marketing, public relations, and promotional programs. These activities can include paying the salaries and benefits of marketing and brand-building personnel, as well as any other overhead related to the marketing department. Additionally, the Brand Fund can cover reasonable administrative costs and overhead related to the administration of the Brand Fund itself and the implementation of Brand Fund-supported programs.
For a prospective Beem Light Sauna 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 to cover the franchisor's marketing and administrative overhead. In 2024, 60.61% of Brand Fund expenditures were allocated to administrative expenses. While this may raise concerns about how much of the fund directly benefits franchisees, it is a fairly common practice in franchising for the Brand Fund to cover such overhead costs.
It is important to note that Beem Light Sauna has the right to direct all marketing programs and uses of the Brand Fund. While they may consult with a franchisee advisory council, the final decision on creative concepts, materials, and media used in the programs remains with the franchisor. The FDD does not guarantee that franchisees will benefit from the Brand Fund in proportion to their contributions. Franchisees can request an unaudited statement of contributions and expenditures for the Brand Fund within 60 days after the close of the fiscal year to review how the funds are being used.
Prospective franchisees should consider the allocation of Brand Fund expenditures and the franchisor's control over the fund when evaluating the Beem Light Sauna franchise opportunity. Understanding how the Brand Fund is managed and used is crucial for assessing the potential return on investment and the level of support franchisees can expect for marketing and advertising efforts.