Risk Score
Pending analysis
Investment Range
$569,757 - $1,193,974
Franchise Fee
$35,000
Total US Locations
37
Business Summary
SWTHZ operates businesses that offer mind and body wellness experiences and services. These services are currently focused on private infrared sauna, contrast therapies, and other non-invasive therapies, all offered under the "SWTHZ" brand name.
Corporate History
LS Franchisor LLC, operating under the SWTHZ brand, was formed as a Georgia limited liability company on March 3, 2022. It is an indirect wholly-owned subsidiary of Legacy Franchise Concepts, L.P. The company began offering franchises for SWTHZ businesses in May 2022, and its sole business is to sell and service these franchises. Although LS Franchisor LLC has not operated any SWTHZ businesses itself, its affiliates owned and operated 15 such businesses by the end of 2024, indicating prior operational experience within the corporate family. An affiliate, Legendary Sweat, LLC (LS Opco), owns the trademarks and other intellectual property used by SWTHZ businesses.
Financial Overview
Investment Range
$569,757 - $1,193,974
Franchise Fee (Low)
$35,000
Franchise Fee (High)
$45,000
Royalty %
6%
Marketing %
5%
Equipment Costs (Low)
$420,257
Equipment Costs (High)
$874,894
Working Capital
$30,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
SWTHZ's (LS Franchisor LLC) audited financial statements show a significant negative equity balance as of December 31, 2024, with total liabilities far exceeding total assets, resulting in a shareholder deficit of over $10 million. A large portion of this deficit is due from its parent company. While the company reported positive net income in 2024, the independent auditor's report includes an emphasis of matter, noting that the financial statements are not necessarily indicative of conditions if the company operated unaffiliated. Furthermore, the FDD itself contains a special risk disclosure, stating that the franchisor's financial condition calls into question its financial ability to provide services and support to franchisees.
Financing Details
SWTHZ (LS Franchisor LLC) does not offer any direct or indirect financing to its franchisees under either the Franchise Agreement or the Multi-Unit Development Agreement. Additionally, SWTHZ does not guarantee any promissory notes, mortgages, leases, or other financial obligations incurred by its franchisees.
Performance Metrics
Total US Locations
37
Franchised Units
22
Corporate Units
15
Avg Square Footage
1,900
Franchising Since
2022
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
4
Litigation Summary
SWTHZ (LS Franchisor LLC) has two consolidated litigation matters disclosed in its FDD. The first involves lawsuits filed against Kyle Casella, a Vice President and Secretary of SWTHZ, by Walker Edison Furniture Company, LLC and Blue Owl Capital Corporation. These cases, consolidated in May 2024, allege fraudulent transfer, civil conspiracy, and fraudulent inducement related to a company recapitalization and dividend, and are currently in discovery. The second consolidated litigation involved SWTHZ's affiliate, LS Opco, and other related entities, in a dispute with HotBox Enterprises, LLC and its owners. This dispute arose after LS Opco acquired rights to HotBox businesses, opened several, and then rebranded them to SweatHouz after a disagreement. HotBox alleged unfair business practices, breach of contract, and intellectual property misuse. These lawsuits were filed in 2020 and confidentially settled in February 2022.
Bankruptcy History
SWTHZ (LS Franchisor LLC) has no bankruptcy history to report for itself, its predecessors, parents, affiliates, or key management personnel. No bankruptcy proceedings are required to be disclosed in this item.
Agreement Terms
Initial Term
10 years
Renewal Term
5 years
Renewal Conditions
To renew their franchise agreement, SWTHZ franchisees must provide written notice between 90 days and 12 months before the current term ends. They must be in full compliance with all System Standards and not be in breach of any agreements with SWTHZ or its affiliates, ensuring all financial obligations are met. Franchisees must also prove they have the right to occupy their business premises for the new term and pay SWTHZ's then-current successor franchise fee. Additionally, they are required to sign SWTHZ's then-current franchise agreement and a general release of claims, and comply with all current qualification and training requirements. SWTHZ must also be actively offering franchises in the state where the franchisee's business is located at the time of renewal.
Training & Support Program
Franchisor Assistance
Before opening, SWTHZ (LS Franchisor LLC) provides assistance with construction management services, site and lease review and approval, and prototypical plans for the business layout. SWTHZ helps with the purchase of necessary equipment, signs, and opening inventory by providing lists of approved suppliers (which may include affiliates) and written specifications for other items. Franchisees and their designated managers must complete an initial training program at SWTHZ's headquarters or virtually. For the first two businesses, SWTHZ also offers training and on-site assistance for pre-opening marketing and grand opening support. Throughout the operational term, SWTHZ provides ongoing access to its Operations Manual, lists of authorized vendors, System Standards, advertising and marketing materials, and administers the Brand Fund.
Initial Training Hours
75
Training Location
SWTHZ provides initial training at its Atlanta, GA headquarters or virtually, and also offers on-site training at the franchisee's business location.
Ongoing Support
After opening, SWTHZ (LS Franchisor LLC) provides ongoing support by offering additional training upon request and agreement. Franchisees maintain access to an electronic copy of the Operations Manual, receive lists of authorized vendors and suppliers, and are provided with System Standards and suggested operating procedures. SWTHZ assists with advertising and marketing materials and programs, and administers a Brand Fund to promote the SWTHZ brand. Franchisees and their employees may also be required to attend annual conferences and periodic refresher training courses.
Franchise Requirements
Ideal Candidate Profile
SWTHZ (LS Franchisor LLC) seeks franchisees that, if an entity, must designate a Managing Owner who holds at least a 10% ownership and voting interest. Additionally, a Designated Manager must be appointed to supervise the day-to-day operations of the SWTHZ business on a full-time basis, demonstrating continuous best efforts to promote the business and its brand. This Designated Manager must meet SWTHZ's educational and business experience criteria and successfully complete all required training programs.
Industry Experience Required
No
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
retail
Owner Participation
supervisory
Territory Type
protected
Staffing Notes
SWTHZ (LS Franchisor LLC) requires that each business be managed by a full-time Designated Manager who meets specific educational and business experience criteria and completes all required training. Franchisees are solely responsible for hiring all other employees and ensuring they complete an approved training program to meet minimum brand standards before providing services. While SWTHZ establishes System Standards for staffing levels, employee qualifications, training, dress, and appearance, the franchisee retains sole responsibility for aspects such as employee selection, promotion, work hours, compensation, and working conditions.