Risk Score
Pending analysis
Investment Range
$191,675 - $625,175
Franchise Fee
$40,000
Total US Locations
1
Business Summary
Red Light Method Franchising, LLC offers a franchise to operate a hybrid spa-gym, which is a boutique fitness business. These studios provide red light therapy spa treatments using a medical-grade, pad-based device. They also offer group Power Plate classes, with the option for franchisees to add Pilates classes. The red light therapy devices used are FDA-cleared for inch loss, temporary pain relief, and increased blood circulation. Franchisees can choose between a Classic Model, which includes red light therapy and Power Plate classes, or a Pilates Model, which adds Pilates reformers and classes.
Corporate History
Red Light Method Franchising, LLC was formed as a Missouri limited liability company on July 13, 2023, and began offering franchises on March 7, 2024. The company is a wholly-owned subsidiary of Red Lite Gym, LLC, which was formed on January 15, 2022. The parent company first opened a business similar to the Red Light Method franchise in August 2022 under the name 'Red Lite Gym', and then rebranded it to 'Red Light Method' in July 2023.
Financial Overview
Investment Range
$191,675 - $625,175
Franchise Fee (Low)
$40,000
Franchise Fee (High)
$50,000
Royalty %
6%
Marketing %
2%
Equipment Costs (Low)
$112,000
Equipment Costs (High)
$380,000
Working Capital
$32,500
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Red Light Method Franchising, LLC is a very new company with a limited operating history, having been formed in July 2023. For its first fiscal period ending June 30, 2024, the company reported a net loss of $29,408. However, its balance sheet indicates a healthy current financial position with $135,138 in cash and total members' equity of $149,551. The company's financial statements reflect its early stage of development, including funding various startup costs for building its franchise system.
Financing Details
Red Light Method Franchising, LLC does not offer any direct or indirect financing to its franchisees. Additionally, the company does not guarantee any notes, leases, or other obligations incurred by franchisees.
Performance Metrics
Total US Locations
1
Franchised Units
0
Corporate Units
1
Avg Square Footage
1,750
Franchising Since
2024
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Summary
Red Light Method Franchising, LLC has no litigation to disclose in Item 3 of its Franchise Disclosure Document.
Bankruptcy History
Red Light Method Franchising, LLC has no bankruptcy history to disclose in Item 4 of its Franchise Disclosure Document.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
To renew their franchise agreement, Red Light Method franchisees must comply with all provisions of the Franchise Agreement, be in good standing, and bring their Studio into compliance with the franchisor's then-current standards. Franchisees must also provide written notice of their intent to renew between 90 and 180 days before the agreement expires. They will need to sign the then-current form of Franchise Agreement, which may have materially different terms, and execute a general release of claims. A renewal fee of $7,777 is also required.
Training & Support Program
Franchisor Assistance
Before opening, Red Light Method Franchising, LLC provides franchisees with initial training, site selection guidelines, and approval processes. They also loan an operations manual, provide specifications for layout and design, and supply a list of approved equipment and suppliers. Additionally, the franchisor licenses its trademarks and offers consultation and advice for grand opening advertising. During operation, Red Light Method Franchising, LLC continues to specify or approve equipment and suppliers, offer additional training (for a fee upon request), and may set minimum or maximum prices for products and services. The franchisor can also procure insurance if a franchisee fails to, institute customer satisfaction audits, administer a marketing fund, offer regular consultation and advice for administrative and operational issues, and manage the customer gift card program.
Initial Training Hours
54
Training Location
Hybrid: In-person at training facilities in Bentonville, Arkansas, or Reno, Nevada, and online.
Ongoing Support
After opening, Red Light Method Franchising, LLC provides ongoing support to franchisees through various services. They will specify or approve certain equipment and suppliers for the Studio. Additional training is available upon request to the franchisee and their employees, though associated costs are the franchisee's responsibility. The franchisor may also set fixed minimum or maximum prices for products and services and can procure required insurance on behalf of the franchisee if needed. Red Light Method Franchising, LLC may also implement programs for auditing customer satisfaction and other quality control measures. The franchisor maintains and administers a national advertising and marketing fund. Franchisees can receive regular consultation and advice in response to their inquiries regarding administrative and operating issues. The franchisor also manages a system-wide customer gift card program.
Franchise Requirements
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
retail
Owner Participation
Supervisory
Territory Type
exclusive
Territory Size Requirements
Red Light Method territories are defined by cities and neighborhoods, using data analytics software, public records, and information. The specific size is determined by the franchisor. In rural or suburban areas, a territory will typically include a population of 50,000 to 200,000 individuals. For dense urban environments, territories will encompass a population of approximately 25,000 to 100,000 individuals.
Staffing Notes
Red Light Method franchisees are responsible for hiring and employing all staff, who are considered their own employees, not the franchisor's. Franchisees must ensure the Studio is always staffed with a sufficient number of qualified personnel trained to the franchisor's standards. While the franchisor recommends the owner personally supervise the Studio, a designated Studio Manager, who has successfully completed the Red Light Method Training Program, can serve as the on-premises supervisor. The franchisor does not have the authority to hire or fire franchisee employees, and franchisees are solely responsible for all employment decisions and compliance with labor laws.