beem Light Sauna: $785K Annual Sales vs. $512K-$738K Franchise Cost

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 2024 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 2024 FDD

Section III – Number of franchised and company-owned beem Light Sauna outlets at the start of the year and the end of the year for 2021, 2022, and 2023, based on Item 20 of the company’s 2024 FDD

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 2024 FDD, including information on the:

• 2023 gross sales, cost of goods sold, gross profit, disclosed operating expenses and estimated fees, and net profit for the 2 beem Light Sauna affiliate-owned studios, which opened on October 1, 2021 and March 27, 2022, respectively

• 2023 gross sales for the 1 beem Light Sauna franchised studio that opened on January 21, 2023, and that operated for nearly the entire fiscal year 2023

• start date, opening date, pre-launch gross sales, first 31 days of gross sales, and pre-launch + first 31 days of gross sales for the 8 beem Light Sauna studios (7 franchised and 1 affiliate-owned) that engaged in pre-opening membership sales activities during the pre-launch period

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 2024 FDD:

• Initial Franchise Fee:  $59,900
• Rent and Security Deposit:  $5,400 to $10,500
• Construction Management:  $19,000
• Utilities:  $500 to $2,000
• Architect Fee:  $13,000 to $15,000
• Leasehold Improvements:  $231,906 to $301,392
• Initial Advertising Spend:  $22,550 to $27,550
• Pre-Opening/Pre-Launch Consulting and Membership Services:  $0 to $50,000
• Inventory, Furniture, Fixtures, and Equipment (Initial Equipment and Supply Package):  $129,153 to $169,649
• Computer Systems:  $1,000 to $2,000
• Insurance:  $4,000 to $6,000
• Signage:  $8,000 to $14,000
• Office Expenses:  $500 to $1,500
• Licenses and Permits:  $500 to $1,500
• Professional Fees (lawyer, accountant, etc.):  $1,500 to $3,000
• Travel, Lodging, and Meals for Initial Training:  $1,000 to $6,000
• Additional Funds (for First 3 Months):  $15,000 to $50,000
• Total Estimated beem Light Sauna Franchise Costs:  $512,909 to $738,991

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 2024 FDD:

• Initial Franchise Fee:  $59,900

• 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.

• Marketing Agency Management Fee:  you must use the marketing agency beem Light Sauna designates (currently, socialight Media) and pay their then-current management fee, which is currently $850 per month

• Regional Cooperative Contribution:  as determined by the cooperative; currently, beem Light Sauna has not established a Regional Cooperative

Section III – Number of Franchised and Company-Owned beem Light Sauna Outlets

Franchised

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:  1
• Net Change:  +1

2023

• Outlets at the Start of the Year:  1
• Outlets at the End of the Year:  3
• Net Change:  +2

Company-Owned

2021

• 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

2023

• Outlets at the Start of the Year:  2
• Outlets at the End of the Year:  2
• Net Change:  0

Section IV – News Updates on the beem Light Sauna Franchise

• beem Light Sauna Announces New Deals for the Northeast as They Continue to Expand

• beem Light Sauna Illuminates Their Plans to Build on an Impressive First Half of the Year

• 2023 Health and Wellness Spotlight: beem Light Sauna and Infrared Light Therapy

• beem Light Sauna, a Fast-Growing Boutique Wellness Concept, Awards First Area Development Partners in the Dallas-Fort Worth Metropolitan Area

• beem Light Sauna Did Not Rank on Entrepreneur’s 2024 Franchise 500 List

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the beem Light Sauna Franchise (Item 19, 2024 FDD)

• There were 9 Studios operating in the United States as of the Issuance Date of the 2024 Disclosure Document. Of those, 5 Studios were operating as of December 31, 2023. The franchisor’s affiliates, Sweat and Salty and SmartYou, operated 2 of them (the “Affiliate-Owned Studios”) and franchisees operated the other 3 (the “2023 Franchised Studios”).

• been Light Sauna had 4 franchisees each open 1 Studio in 2024, before the Issuance Date of the 2024 Disclosure Document (the “2024 Franchised Studios” and, together with the 2023 Franchised Studios, the “Franchised Studios”). The franchisor includes the 7 Franchised Studios only in the financial performance representations in Part 3 below.

• Except as the franchisor explains in each Part below, the franchisor did not exclude any Affiliate-Owned Studios or any Franchised Studios from the financial performance representations contained in this Item 19.

• This Item 19 presents information about the financial performance of the Affiliate-Owned Studios and Franchised Studios. This information was reported to the franchisor by the Affiliate-Owned Studios and the Franchised Studios. The franchisor 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.

Part 1 – Affiliate-Owned Studios: Gross Sales, COGS, Other Fixed Operating Costs and Expenses, and Estimated Fees During Fiscal Year 2023

• Part 1 below discloses the actual historical Gross Sales generated, as well as COGS, operational expenses, and imputed fees for the 2 Affiliate-Owned Studios from January 1, 2023 through December 31, 2023 (“Fiscal Year 2023”). The 2 Affiliate-Owned Studios opened on October 1, 2021 and March 27, 2022, respectively.

Affiliate-Owned Studio in Huntersville, NC

Actual Gross Sales:  $519,646.49

Less: Cost of Goods Sold:  $26,177.02

Gross Profit:  $493,469.47

Disclosed Operating Expenses

• Total Local Marketing:  $28,200.00
• Operations Expenses:  $63,873.49
• Payroll:  $103,456.66
• Rent:  $68,116.60
• Imputed Royalty Fees:  $36,375.25
• Imputed Brand Fund Contribution:  $5,196.46
• Total Disclosed Operating Expenses:  $305,218.46

Net Profit:  $188,251.00 (36.23%)

Affiliate-Owned Studio in South End, NC

Actual Gross Sales:  $715,150.13

Less: Cost of Goods Sold:  $8,761.40

Gross Profit:  $706,388.73

Disclosed Operating Expenses

• Total Local Marketing:  $33,820.64
• Operations Expenses:  $106,340.25
• Payroll:  $187,972.29
• Rent:  $93,608.96
• Imputed Royalty Fees:  $50,060.51
• Imputed Brand Fund Contribution:  $7,151.50
• Total Disclosed Operating Expenses:  $478,954.15

Net Profit:  $227,434.58 (31.80%)

Average of the 2 Affiliate-Owned Studios (Calculated by Franchise Chatter)

Actual Gross Sales:  $617,398.31 (100.0%)

Less: Cost of Goods Sold:  $17,469.21 (2.8%)

Gross Profit:  $599,929.10 (97.2%)

Disclosed Operating Expenses

• Total Local Marketing:  $31,010.32 (5.0%)
• Operations Expenses:  $85,106.87 (13.8%)
• Payroll:  $145,714.48 (23.6%)
• Rent:  $80,862.78 (13.1%)
• Imputed Royalty Fees:  $43,217.88 (7.0%)
• Imputed Brand Fund Contribution:  $6,173.98 (1.0%)
• Total Disclosed Operating Expenses:  $392,086.31 (63.5%)

Net Profit:  $207,842.79 (33.7%)

• Part 1 above excludes results from the 7 Franchised Studios because none of the 7 Franchised Studios were open and operating for the full Fiscal Year 2023.

Part 2 – 2023 Franchised Studio Gross Sales

• Part 2 below details the actual historical Gross Sales generated during Fiscal Year 2023 by the 1 Franchised Studio that opened on January 21, 2023, and that operated for nearly the entire Fiscal Year 2023.

• The franchisor did not include any of the other Franchised Studios in this Part 2 because none of those Franchised Studios operated for the entire, or nearly the entire, Fiscal Year 2023.

• The Gross Sales amount listed below is the actual amount generated (with no adjustments or extrapolation to account for the period January 1, 2023 to January 20, 2023).

• Actual Gross Sales for 2023 Franchised Studio:  $785,540.66

Part 3 – Gross Sales for Affiliate-Owned Studio and Franchised Studios During the Pre-Launch Period and, as Applicable, the First 31 Days of Operation After Pre-Launch Period

• Part 3 below details actual historical Gross Sales generated during the Pre-Launch Period and, as applicable, the first 31 days of operation, for the Studios listed below.

• For each Studio listed below, the “Pre-Launch Period” means the period beginning on the date the Studio begins selling memberships for the Studio’s services (the “Start Date”) and ending on the date that is the day before the Studio opens to the public for business (the “Opening Date”).

• As disclosed below in Part 3, the Pre-Launch Period has lasted between 12 to 16 weeks before the Opening Date.

• All 7 Franchised Studios and 1 Affiliate-Owned Studio engaged in pre-opening membership sales activities during the Pre-Launch Period.

• Part 3 does not include 1 Affiliate-Owned Studio, located in Huntersville, North Carolina, because that Studio converted from a Sweat and Salty location in 2021 and did not have a Pre-Launch Period.

Studio 1

• Start Date:  8/17/2022
• Opening Date:  1/21/23
• Pre-Launch Gross Sales:  $49,203.50
• First 31 Days of Gross Sales:  $71,961.30
• Pre-Launch + First 31 Days of Gross Sales:  $121,164.80

Studio 2

• Start Date:  12/17/2023
• Opening Date:  4/15/2024
• Pre-Launch Gross Sales:  $45,900
• First 31 Days of Gross Sales:  N/A*
• Pre-Launch + First 31 Days of Gross Sales:  $ –

Studio 3

• Start Date:  8/13/2023
• Opening Date:  3/26/24
• Pre-Launch Gross Sales:  $28,387.00
• First 31 Days of Gross Sales:  N/A*
• Pre-Launch + First 31 Days of Gross Sales:  $ –

Studio 4

• Start Date:  8/4/2023
• Opening Date:  1/23/24
• Pre-Launch Gross Sales:  $31,804.00
• First 31 Days of Gross Sales:  $43,243.42
• Pre-Launch + First 31 Days of Gross Sales:  $75,047.42

Studio 5

• Start Date:  2/10/2023
• Opening Date:  7/17/23
• Pre-Launch Gross Sales:  $26,310.00
• First 31 Days of Gross Sales:  $40,690.00
• Pre-Launch + First 31 Days of Gross Sales:  $67,000.00

Studio 6 (Affiliate-Owned Studio in South End, NC)

• Start Date:  1/17/2022
• Opening Date:  3/27/22
• Pre-Launch Gross Sales:  $21,229.00
• First 31 Days of Gross Sales:  $32,788.13
• Pre-Launch + First 31 Days of Gross Sales:  $54,017.13

Studio 7

• Start Date:  8/3/2023
• Opening Date:  11/17/23
• Pre-Launch Gross Sales:  $14,019.00
• First 31 Days of Gross Sales:  $30,108.30
• Pre-Launch + First 31 Days of Gross Sales:  $44,127.30

Studio 8

• Start Date:  12/17/2023
• Opening Date:  3/30/24
• Pre-Launch Gross Sales:  $10,780.00
• First 31 Days of Gross Sales:  N/A*
• Pre-Launch + First 31 Days of Gross Sales:  $ –

Average

• Pre-Launch Gross Sales:  $28,454
• First 31 Days of Gross Sales (for 5 studios that had been in operation for a full 31 days as of the issuance date of the 2024 FDD):  $43,758
• Pre-Launch + First 31 Days of Gross Sales:  $72,212

• *As of the Issuance Date of the 2024 Disclosure Document, these 2024 Franchised Studios had not been in operation for a full 31 days.

• “Gross Sales” means all revenue from the sale of all products and performance of services from the Studio, 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 the Studio, including any consideration that you receive from third-party vendors/suppliers.

• “Gross Sales” does not include monies that are collected and submitted by you for transmittal to appropriate taxing authorities (such as sales tax), discounts, allowances, and returns (including cash refunds).

• “COGS” or Cost of Goods Sold means the cost of retail items, water bottles, and other merchandise sold from a Studio. For the Affiliate-Owned Studio in Huntersville, NC, COGS includes any sales-based commissions the Studio pays its sales personnel. For the Affiliate-Owned Studio in South End, NC, COGS does not include any sales-based commissions the Studio pays its sales personnel.

• “Gross Profit” means Gross Sales, minus COGS.

• “Total Local Marketing” means the total amount Affiliate-Owned Studios expended during Fiscal Year 2023 on local marketing efforts, including local marketing and promotions activities and advertising agency management fees. Under the current form of Franchise Agreement, you are required to expend a minimum of $1,500 per month ($18,000 per year) on local marketing, however, the franchisor recommends that you spend more.

• “Operations Expenses” means amounts other than Total Local Marketing, Payroll, Rent, Imputed Royalty Fee, and Imputed Brand Fund Contribution that Affiliate-Owned Studios expended during Fiscal Year 2023, including utilities, repairs, office supplies, equipment, cleaning, licenses, dues and subscriptions, bookkeeping, and insurance.

• Operations Expenses also includes the (i) estimated POS Fee of $268/month, (ii) the Annual Membership Contract Fee of $250 per year, (iii) the Technology Fee of $450 per month, and (iv) the cost of towels (the Affiliate-Owned Studio in South End, NC utilized a towel service at a cost of approximately $3,750 per month. The Affiliate-Owned Studio in Huntersville, NC utilized in-house washer-dryers).

• “Payroll” means the total cost and compensation paid in connection with the engagement of staff to operate Affiliate-Owned Studios. The term “Payroll” does not include salary or other compensation paid to a Designated Manager, general manager, or owner, because the Affiliate-Owned Studios are owner operated and managed. If you hire a Designated Manager or other approved Studio manager to operate your Studio, your Payroll expense will be higher.

• “Rent” means the total amount that Affiliate-Owned Studio incurred in connection with base rent during Fiscal Year 2023.

• “Imputed Royalty Fees” means the total Royalty Fee that Affiliate-Owned Studios would have had to pay the franchisor if Affiliate-Owned Studios were owned by a System franchisee and governed by the current form of Franchise Agreement.

• “Imputed Brand Fund Contribution” means the total Brand Fund Contribution that Affiliate-Owned Studios would have to contribute if Affiliate-Owned Studios were owned by a System franchisee and governed by the current form of Franchise Agreement.

• Net Profit means Gross Profits, less Total Local Marketing, Operations Expenses, Payroll, Rent, Imputed Royalty Fees, Imputed Brand Fund Contribution, interest, income taxes, depreciation, and amortization.

• The Affiliate-Owned Studios and Franchised Studios generally reflect the mix of characteristics that the franchisor expects for new franchised Studios. For example, these Studios occupy between approximately 1,330 to 1,710 square feet; and fit approximately 6 to 8 saunas and showers.

• The financial performance representation figures do not reflect all the costs of sales, operating expenses, or other costs or expenses that must be deducted from the gross revenue or gross sales figures to obtain your net operating income or net profit.

Section VI – beem Light Sauna Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️