In this exclusive Franchise Chatter FDD Talk post, you’ll learn the following:
Section I – Estimated initial investment (franchise costs) for a beem Light Sauna franchise, based on Item 7 of the company’s 2023 FDD
Section II – Initial franchise fee, royalty fee, and marketing fee for a beem Light Sauna franchise, based on Items 5 and 6 of the company’s 2023 FDD
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Section IV – News updates on the beem Light Sauna franchise opportunity
Section V – Presentation and analysis of beem Light Sauna’s financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2023 FDD, including information on the:
- number of founding members, gross sales generated during pre-launch, and gross sales generated during its first 30 days by the beem Light Sauna franchised location in Virginia Beach, Virginia, which opened in January 2023
- 2022 gross sales, cost of goods sold, gross profit, disclosed operating expenses and estimated fees, and net income for the first beem Light Sauna affiliate-owned location, which opened on March 27, 2022
- 2022 gross sales, cost of goods sold, gross profit, disclosed operating expenses and estimated fees, and net income for the second beem Light Sauna affiliate-owned location, which previously operated under a different name and was rebranded to beem on October 1, 2021
Section VI – Key ratios, comparables, computations, and analyses for the beem Light Sauna franchise opportunity (exclusive content for Platinum subscribers)
Section I – beem Light Sauna Franchise Costs
- beem Light Sauna franchise costs, based on Item 7 of the company’s 2023 FDD:
- Initial Franchise Fee: $49,900
- Rent and Security Deposit: $5,400 to $14,300
- Utilities: $500 to $2,000
- Leasehold Improvements: $36,000 to $305,000
- Initial Advertising Spend: $17,550 to $27,550
- Inventory, Furniture, Fixtures, and Equipment (Initial Equipment and Supply Package): $70,400 to $107,000
- Computer Systems: $2,000 to $4,000
- Insurance: $4,000 to $6,000
- Signage: $4,000 to $10,000
- Office Expenses: $500 to $1,500
- Licenses and Permits: $500 to $1,500
- Business Planning and Miscellaneous Expenses: $1,000 to $3,000
- Professional Fees (lawyer, accountant, etc.): $1,500 to $3,000
- Travel, Lodging, and Meals for Initial Training: $1,000 to $4,000
- Additional Funds (for First 3 Months): $15,000 to $30,000
- Total Estimated beem Light Sauna Franchise Costs: $209,250 to $568,750
Section II – beem Light Sauna’s Initial Franchise Fee, Royalty Fee, and Marketing Fee
- beem Light Sauna’s initial franchise fee, royalty fee, and marketing fee, based on Items 5 and 6 of the company’s 2023 FDD:
- Initial Franchise Fee: $49,900
- Royalty Fee: the greater of 7% of your monthly Gross Sales, or $1,750 per month
- Brand Fund Contribution: currently, the Brand Fund Contribution is the greater of 1% of Gross Sales per month or $250 per month. beem Light Sauna reserves the right to increase your Brand Fund contribution to the greater of 2% of Gross Sales or $500 per month.
- Local Marketing: after your business opens, you will be required to spend a minimum of $1,500 per month in advertising spend (“Local Marketing Requirement”). You will be required to select beem Light Sauna or an Approved Supplier and pay beem Light Sauna or that Approved Supplier their then-current ad management fee which is in addition to your Local Marketing Requirement.
Section III – Number of Franchised and Company-Owned beem Light Sauna Outlets
Franchised
2020
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When I owned a UPS Store, I learned firsthand how much your ZIP code shapes your outcome. I sold my store at a premium because my territory was in a high-value area. The best areas go first, and once they're gone, they're gone. Enter your ZIP code, and a territory specialist will walk you through the franchises still available near you, drawing on information that isn't publicly accessible, saving you months of wasted research.🔴Free Webinar: 6 Under-the-Radar Franchise Concepts That Serious Buyers Should Know
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- Outlets at the End of the Year: 0
- Net Change: 0
2021
- Outlets at the Start of the Year: 0
- Outlets at the End of the Year: 0
- Net Change: 0
2022
- Outlets at the Start of the Year: 0
- Outlets at the End of the Year: 0
- Net Change: 0
Company-Owned
2020
- Outlets at the Start of the Year: 0
- Outlets at the End of the Year: 1*
- Net Change: +1
*This outlet opened in 2020 but rebranded to beem on October 1, 2021.
2021
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When I owned a UPS Store, I learned firsthand how much your ZIP code shapes your outcome. I sold my store at a premium because my territory was in a high-value area. The best areas go first, and once they're gone, they're gone. Enter your ZIP code, and a territory specialist will walk you through the franchises still available near you, drawing on information that isn't publicly accessible, saving you months of wasted research.📈Dreaming of Multi‑Unit Success? Lock In Prime Territories Before They're Gone.
Colin started as a team member at 21 and now owns 6 locations in Tampa Bay. Lisa came from marketing and built 21 in San Diego. The most successful multi-unit owners move early and secure markets with room to grow. Use our free tool to search multiple ZIP codes and find franchises where you can still stack locations, before someone else does. A franchise specialist will be in touch to present what's available.- Outlets at the Start of the Year: 1
- Outlets at the End of the Year: 1
- Net Change: 0
2022
- Outlets at the Start of the Year: 1
- Outlets at the End of the Year: 2
- Net Change: +1
Section IV – News Updates on the beem Light Sauna Franchise
Section V – Financial Performance Representations (Average Revenues and/or Profits) for the beem Light Sauna Franchise (Item 19, 2023 FDD)
- As of December 31, 2022, there were 2 affiliate-owned locations (each, an “Affiliate-Owned Location”) and 0 franchised locations (“Franchised Locations”). However, beem Light Sauna did have its first Franchised Location open in January 2023 and it included certain financial information about this Franchised Location as set forth below. beem Light Sauna did not exclude any Affiliate-Owned Locations or Franchised Locations in this Financial Performance Representation.
Part 1 – Franchised Location Opening Day Membership Enrollment, Pre-Launch Gross Sales, and First 30 Days of Gross Sales
- Part 1 of this Financial Performance Representation details (a) the number of founding members and Gross Sales generated during pre-launch by the Franchised Location, and (b) the Gross Sales generated by the Franchised Location during its first 30 days in Virginia Beach, Virginia.
- Studio Location: Virginia Beach
- Founding Members: 318
- Pre-Launch Gross Sales: $49,253.10
- Additional Gross Sales Generated During First 30 Days Upon Studio Opening: $72,364.00
Part 2 – Affiliate-Owned Location #1 Gross Sales, Certain COGS, Other Fixed Operating Costs and Expenses, and Estimated Fees Incurred from January 1 to December 31, 2022
- Part 2 of this Financial Performance Representation details the historical Gross Sales generated, as well as certain COGS, operational expenses, and defined estimated fees for the first Affiliate-Owned Location (“Affiliate-Owned Location #1”) from January 1, 2022 through December 31, 2022.
- Jan*: $3,270
- Feb*: $10,309
- Mar*: $8,492
- Apr: $34,604
- May: $46,065
- Jun: $51,233
- Jul: $62,140
- Aug: $53,117
- Sep: $57,306
- Oct: $69,711
- Nov: $80,522
- Dec: $66,066
- Total: $542.835
*Months in which the Affiliate-Owned Location was in pre-launch and not open, specifically from January 17, 2022 to March 14, 2022.
Gross Sales (studio opened March 27, 2022): $542,838.37
COGS: $4,596.24
Gross Profit: $538,242.13
Disclosed Operating Expenses
- Total Local Marketing: $45,500
- Operations Expenses: $71,075.64
- Payroll: $128,970.82
- Rent: $42,875.29
- Estimated Royalty Fees: $37,998.69
- Estimated Brand Fund Contribution: $5,428.38
Net Income: $206,393.31
Margin: 38.02%
Monthly Active Members: 272.03
Part 3 – Affiliate-Owned Location #2 Gross Sales, Certain COGS, Other Fixed Operating Costs and Expenses, and Estimated Fees Incurred from January 1 to December 31, 2022
- Part 3 of this Financial Performance Representation details the historical Gross Sales generated, as well as certain COGS, operational expenses, and defined estimated fees for the second Affiliate-Owned Location (“Affiliate-Owned Location #2”) from January 1, 2022 through December 31, 2022.
- Jan: $25,123.36
- Feb: $32,053.98
- Mar: $31,779.72
- Apr: $29,507.05
- May: $34,827.14
- Jun: $33,047.85
- Jul: $35,646.89
- Aug: $28,588.76
- Sep: $37,471.30
- Oct: $41,730.75
- Nov: $55,638.49
- Dec: $56,821.65
- Total: $442,236.94
Gross Sales: $442,236.94
COGS: $11,909.25
Gross Profit: $430,327.69
Disclosed Operating Expenses
- Total Local Marketing: $28,200.00
- Operations Expenses: $46,858.49
- Payroll: $90,289.80
- Rent: $67,612.49
- Estimated Royalty Fees: $30,956.59
- Estimated Brand Fund Contribution: $4,422.37
Net Income: $161,987.95
Margin: 36.63%
Monthly Active Members: 190.97
- This information was reported to beem Light Sauna by the Affiliate-Owned Locations. beem Light Sauna has not independently audited or otherwise verified this information.
- Some outlets have earned this amount. Your individual results may differ. There is no assurance that you’ll earn as much.
- “Gross Sales” includes total studio sales of all products and performance of services from Affiliate-Owned Locations, whether in the form of cash, credit, barter or rebates, and regardless of collection in the case of credit, and income of every kind and nature related to Affiliate-Owned Location #1, including any consideration that you receive from third-party vendors/suppliers.
- “Gross Sales” from customers shall not include monies that are collected and submitted by you for transmittal to the appropriate taxing authority. In computing Gross Sales, you shall be permitted to deduct the amount of cash refunds if such amounts have been included in Gross Sales of the Franchised Business.
- “COGS” or Cost of Goods Sold means the cost of the merchandise that was sold from January 1, 2022 through December 31, 2022.
- “Gross Profit” is calculated by taking the Gross Sales and subtracting the COGS.
- “Total Local Marketing” means the total amount Affiliate-Owned locations expended from January 1, 2022 through December 31, 2022 on local marketing efforts. Under beem Light Sauna’s current form of Franchise Agreement, you are required to expend a minimum of $1,500 per month ($18,000 per year), however, beem Light Sauna recommends that you spend more on Local Marketing.
- “Operations Expenses” includes other amounts Affiliate-Owned Locations expended from January 1, 2022 through December 31, 2022, including, but not limited to, utilities, repairs, CAM, office supplies, equipment, cleaning, licenses, dues and subscriptions, bookkeeping, and insurance.
- Operations Expenses also includes the (i) estimated POS Fee of $268/month from January 1, 2022 through December 31, 2022, (ii) the Annual Membership Contract Fee of $250 per year, and (iii) the Technology Fee of $350 per month from January 1, 2022 through December 31, 2022.
- “Payroll” means the total cost and compensation paid in connection with the engagement of staff to operate Affiliate-Owned Locations. The term “Payroll” does not include salary paid to a Designated Manager/owner since beem Light Sauna’s standard offering assumes the business will be owner-operated.
- “Rent” means the total amount that Affiliate-Owned Locations incurred in connection with base rent from January 1, 2022 through December 31, 2022.
- The term “Estimated Royalty Fees” means the total Royalty Fee that Affiliate-Owned Locations would have had to pay beem Light Sauna from January 1, 2022 through December 31, 2022, if Affiliate-Owned Locations were owned by a System franchisee and governed by beem Light Sauna’s current form of Franchise Agreement.
- beem Light Sauna calculated the Royalty Fees by multiplying the Gross Sales generated by the Affiliate-Owned Locations by .07 to account for the Royalty Fee of 7% set forth and required under beem Light Sauna’s current form of Franchise Agreement.
- The term “Estimated Brand Fund Contribution” means the total Brand Fund Contribution that Affiliate-Owned Locations would have to contribute from January 1, 2022 through December 31, 2022, if Affiliate-Owned Locations were owned by a System franchisee and governed by beem Light Sauna’s current form of Franchise Agreement.
- beem Light Sauna calculated the Brand Fund Contribution by multiplying the Gross Sales generated by the Affiliate-Owned Locations by .01 to account for the Brand Fund Contribution requirement of the greater of (a) 1% of Gross Sales, or (b) $250 per month required under beem Light Sauna’s current form of Franchise Agreement.
- Margin is calculated by taking the Gross Sales, less COGS, Operations Expenses, Payroll, Rent, Estimated Royalty Fees, Total Local Advertising, and Estimated Brand Fund Contribution, dividing that amount by the Gross Sales and multiplying the total by 100.
- Monthly active members means the number of active members each Studio had over the applicable time period. Because of beem Light Sauna’s recent change of software, the data in this line item is from May 3, 2022 to December 31, 2022.
- Affiliate-Owned Location #1 had (a) a median Monthly Active Members of 263.5, (b) a maximum Monthly Active Members of 327, (c) a minimum of 206 Monthly Active members, and (d) the average was met or exceeded in 4 out of 9 months (44%).
- Affiliate-Owned Location #2 had (a) a median Monthly Active Members of 186, (b) a maximum Monthly Active Members of 216, (c) a minimum Monthly Active Members of 172, and (d) the average was met or exceeded in 3 out of 9 months (33%).
- Founding Members are members of beem Light Sauna Virginia Beach who signed up for the recurring renewed membership option prior to the studio opening on January 22, 2023.
- Pre-Launch Gross Sales is Gross Sales generated during the pre-launch sales process at beem Light Sauna Virginia Beach through opening day on January 22, 2023.
- Additional Gross Sales Generated During First 30 Days Upon Studio Opening is Gross Sales generated during the first full month of being open at beem Light Sauna Virginia Beach from January 22, 2023 through February 21, 2023.
- Affiliate-Owned Location #1 officially opened on March 27, 2022. Affiliate-Owned Location #1 operates at a premises that is approximately 1,710 sq. ft. and fits 8 sauna suites.
- Affiliate-Owned Location #2 previously operated under a different name and was rebranded to beem on October 1, 2021. Affiliate-Owned Location #2 operates at a premises that is approximately 1,330 sq. ft. and fits 6 sauna suites without showers nor red light therapy room.
- The franchised businesses offered under the Franchise Disclosure Document are expected to be between 1,300 to 1,800 square feet and hold between 8 and 10 sauna suites with showers.
Part 4 – Average Gross Sales, Certain COGS, Other Fixed Operating Costs and Expenses, and Estimated Fees Incurred from January 1 to December 31, 2022 for the 2 Affiliate-Owned Locations (Calculated by Franchise Chatter)
Gross Sales: $492,538 (100.0%)
COGS: $8,253 (1.7%)
Gross Profit: $484,285 (98.3%)
Disclosed Operating Expenses and Estimated Fees
- Total Local Marketing: $36,850 (7.5%)
- Operations Expenses: $58,967 (12.0%)
- Payroll: $109,630 (22.3%)
- Rent: $55,244 (11.2%)
- Estimated Royalty Fees: $34,478 (7.0%)
- Estimated Brand Fund Contribution: $4,925 (1.0%)
- Total Disclosed Operating Expenses and Estimated Fees: $300,094 (60.9%)
Net Income: $184,191 (37.4%)
Margin: 37.4%
Monthly Active Members: 231.50
Section VI – beem Light Sauna Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️
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