Published on 1 Jun 2022 Time 10 min read Last update by 7 Feb 2024

Perspire Sauna Studio Poised for Expansion (2024)

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Perspire Sauna Studio offers customers infrared sauna sessions, chromotherapy, and relaxation. Specifically, they utilize the infrared sauna that combines the centuries-old sauna practice with the modern science of infrared technology and red light therapy. Its first-of-its-kind infrared lighting systems enhance the user experience.  

Perspire Sauna Studio is striving to bring the benefits of infrared saunas to communities in a friendly, comfortable, spa-like atmosphere. Managed and co-founded by Lee Braun, the studio positioned itself in the $1.1 trillion dollar wellness economy in 2010. It was founded as the founders were shocked to discover there was no easy way to get a sauna session and they aimed to make the benefits of saunas convenient and accessible to the community. To franchise with them, you only need to have minimal labor and no special licensing, skills, or training is required! 

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How is Perspire Sauna Studio Positioned in the Health and Wellness Industry?

The concept of wellness has been around for a long time. From 2013 to 2017, the wellness economy grew by 5.8% annually, a growth rate nearly five times as fast as global economic growth. Due to the last few years, especially the COVID-19 pandemic, people throughout the world have become more self-aware of the importance of health and wellness. McKinsey in 2021 estimated the global wellness market at more than $1.5 trillion, with annual growth of 5 to 10 percent. According to the Global Wellness Institute, in 2022, the global wellness industry will grow to $4 trillion and increase to 9.9% average annual growth. 

The US has the largest market size in the health and wellness industry at $52.2 billion in value and $15.1 billion in the spa and sauna sector, creating a wide range of opportunities for prospective franchisees who want to join the industry. As the wellness economy includes eleven sectors, the market size of the spa and sauna sector is earning $68 billion. Although it is relatively low compared to other sectors, this indicates a larger room for growth. Prior to 2020, spa revenues were growing by 8.7% annually but were hit hard by the pandemic. However, it is projected to recover quickly to pre-pandemic levels. 


perspire sauna

What is the Perspire Sauna Studio Franchise Cost?

The total investment necessary to begin the operation of a Perspire Sauna Studio franchised business is from $370,890 to $562,230. This includes a $45,000 initial franchise fee that must be paid to the franchisor. If you plan to open a multi-unit franchise, you will need to pay the minimum of an additional $35,000 for the second studio and $30,000 for the third and each additional studio.

Once the operations begin, franchisees are expected to pay the company a royalty fee of 6% on annual gross revenue but no less than $500 per month whichever is greater, an advertising fee of 2% on monthly gross sales, and a local advertising fee of $2,500 minimum per month. There are other fees including equipment upgrades and facility upgrades every 4 years with costs between $48,580 to $59,240 and $10,000 to $25,000, respectively. 

Estimated Initial Investment

Site Built Location
Type of Expenditure Estimated Amount Low Estimated Amount High Method of Payment When Due To Whom Payment is to be Made
Initial Franchise Fee 45,000 45,000 Lump Sum On Signing Franchise Agreement Us
Initial Equipment Package (Saunas) 48,580 59,240 As Arranged As Arranged Approved/Preferred Supplier
Travel Expenses During Training at our Studios 0 2,500 As Incurred As Incurred Transportation, Hotels Restaurants
Training at your Studio 5,000 5,000 Lump Sum Upon Invoice Us
Three Months Rent and Deposits 18,000 30,000 As Arranged Monthly Landlord
Audio 3,000 4,500 As Arranged As Arranged Suggested Supplier/Vendors
Leasehold Improvements 140,000 250,000 As Arranged As Arranged Contractor and Other Suppliers
Construction Management 15,000 17,000 As Arranged As Arranged Approved Supplier or Us
Millwork 20,000 28,000 As Arranged As Arranged Approved Supplier
Architecture Fees 6,000 12,000 As Arranged As Arranged Architect
Permits, etc 3,000 5,000 As Arranged Local City and State Agencies
Office/Spa Furniture and Equipment 2,500 4,500 As Arranged As Arranged Suppliers
Computer System & Receipt Printer 2,500 3,500 As Incurred As Incurred Apple/MAC
Opening Inventory and Supplies 1,000 2,500 As Incurred As Incurred Suggested Suppliers
In-Room TVs 2,610 3,190 As Incurred As Incurred Suppliers
Pre-Sale Marketing and Gran Opening 15,000 20,000 As Incurred As Arranged Ad Agencies, Local Stations, Us, Suppliers
Insurance 2,000 3,500 As Arranged As Arranged Insurance Carrier
Miscellaneous Pre-Opening and Organization Costs 3,000 4,000 As Incurred As Arranged Attorney, CPA, STATE/Local Agencies, Utility Companies, etc
Estimated Shipping and Sauna Install 7,200 13,800 As Incurred As Arranged Shipping Company and Installer
Signage 6,000 12,000 As Incurred As Arranged Approved Supplier
Site Visits 0 2,000 As Incurred As Invoiced Us
Additional Funds 3-6 Months 25,000 35,000 As Arranged As Incurred You Determine
Total 370,890 562,230

Perspire Sauna Studio Franchise Requirements

The sauna studio is looking for candidates who are any entrepreneurs interested in bringing health and wellness to their community, especially experienced business owners or former franchisees. Although experience in the health and fitness industry is not required, passion for a healthy lifestyle is desired. Specifically, they are expecting their candidates to have $150,000 minimum liquidity and $500,000 minimum net worth.

How Much Do Perspire Sauna Studio Franchise Owners Make?

Although Perspire Sauna Studio Franchise makes representations about a franchisee’s future financial performance or the past financial performance of company-owned or franchised outlets, they only present the financial information on a per-Unit basis for the five stand-alone units that were open the full year of 2019 and 2020. 

Perspire Sauna Studio Franchise Financials


 Studio 1Studio 2Studio 3Studio 4Studio 5Average
Adjusted EBITDA67,446.9094,248.77108,921.7847,747.66158,252.0095,323.42
Profit Margin12.40%20.47%24.55%10.31%27.11%18.97%
perspire sauna 2


 Studio 1Studio 2Studio 3Studio 4Studio 5Average
Adjusted EBITDA104,072.1767,847.8114,881.41135,531.6869,743.1878,415.25
Profit Margin20.46%18.89%8.29%28.98%15.04%18.33%

Compared between 2019 and 2020, the average revenue for the 5 stores decreased from $498,896 to $395,767 due to intermittent closure in response to government restrictions related to the COVID-19 pandemic, especially for studio 3 which is closed almost all 2020. However, the franchisees performed well in 2020, gaining a similar profit margin as of 2019 by controlling the expenses. 

CTA Franchise Specialist 2

2019 Perspire Sauna Studio Average Franchise Sales: $498,896

Initial Investment – Midpoint %Profit Margin Of Average Franchise Sales Estimated Profits Time to Recoup Investment
466,560 13% 64,856 7 years
18% 89,801 5 years
23% 114,746 4 years

2020 Perspire Sauna Studio Average Franchise Sales: $395,767

Initial Investment – Midpoint %Profit Margin Of Average Franchise Sales Estimated Profits Time to Recoup Investment
466,560 13% 51,449 8 years
18% 71,238 6 years
23% 91,026 5 years

In 2020, based on the average sales provided by 5 Perspire Sauna Studio’s franchise locations, at an average of a 18% profit margin it will take around 6 years to recoup your investment. This is longer than most franchise opportunities. You may not get an 18% profit margin which would elongate getting a return on your investment. The time to recoup investments incorporates roughly a 2 year period to scale up the studio. This includes finding the location, building the studio, passing break even, and then reaching significant income. Although the Perspire Sauna claims that it usually takes between five to nine months for the location to open, it can vary across numerous factors mentioned above. 

Is the Perspire Sauna Studio Profit Worth the Franchise Cost?

To assign a valuation multiple for Perspire Sauna Studio franchises, we leverage estimates from DealStats, a database of acquired private company transactions sourced from U.S. business brokers and SEC filings. We reviewed the larger franchise industry as well as selling price multiples for larger systems where more transaction data is available.

Under $1 Million Net Sales

  • Estimated Selling Price = Net Sales – 0.45

$1 Million – $5 Million Net Sales

  • Estimated Selling Price = Net Sales – 0.37

Over $5 Million Net Sales

  • Estimated Selling Price = Net Sales – 2.33

When you go to sell a Perspire Sauna Studio franchise based on the median multiple of 0.45 and net sales of $395,767, it would sell for $178,095. This is significantly lower than the midpoint investment of $466,560. If you have at least 3 stores, the median multiple for net sales between $1 million and $5 million is 0.37, resulting in $1,187,301 in franchise sales. Selling these 3 stores would amount to $439,301. Opening 3 stores do not generate much profit to cover your initial investments either.  

However, as an owner of multiple (12+) Perspire Sauna Studio franchises, you do have the ability to make a significant profit. Perspire Sauna Studio franchise owners with over $5 million in sales have a median multiple of 2.33. So, if you had 13 Perspire Sauna Studio franchises this would be $5.1 million in sales.

Therefore, selling your multi-unit franchise system could amount to $12 million. The more franchises you own, the more earning potential you have as private equity firms become interested in your business instead of individual owner-operators. If the seller averaged $466,560 to open each studio, he/ she could net over $12 million when the restaurants are sold! 

How Many Perspire Sauna Studio Units Have Opened and Closed?

State Year Outlets at Start of Year Outlets Opened Terminations Non-Renewals Reacquired by Franchisor Ceased Operation – Other Reasons Outlets at End of the Year
2018 0 2 0 0 0 0 2
2019 2 4 0 0 0 0 6
2020 6 7 0 0 0 0 13

The number of franchisees increased over the last three years. There were no termination, non-renewals, and ceased operations. On the other hand, they all performed well even under the COVID-19 pandemic. More franchisees join the business right after the pandemic, proving it a viable business model. 

Over the course of 2020 and 2021, Perspire has experienced an influx of signed franchise agreements in areas such as Phoenix, San Diego, Sarasota, and Chicago. Having more than tripled in size since the start of the pandemic, Perspire puts the brand on track to double its current milestone of one million sessions serviced by the end of 2022. 

perspire sauna

Perspire Sauna Studio Income Statement and Balance Sheet Takeaways

As there were increasing revenues from franchise fees and royalties, there were decreases in marketing fees and product sales which drove down the total revenues. Additionally, Perspire Sauna Studio had an increase in its operating expenses, resulting in a $464,676 net loss in 2020, $127,382 more loss than that of 2019. In 2020, they also had taken on a total of $229,609 and $1,350,440 short-term debt and long-term debt, respectively. This resulted in over a $1 million increase in liabilities.   

Franchise Fees18,50016,250
Marketing Fees102,85119,761
Product Sales30,08998,696
Total Revenues311,419376,666
Cost of Sales42,60960,633
Gross Profit268,810316,033
Payroll Expenses210,914170,995
Advertising and Marketing184,146209,351
Office Expenses91,61154,033
Guaranteed Payment60,00060,500
Legal and Professional Fees54,37138,999
Consulting Fees34,7087,500
Travel, Meals and Entertainment31,30938,217
Rent and Leases29,59926,275
Computer and Web Management12,274
Dues and Suscriptions8,09545,700
Taxes and Licenses5,3754,383
Office Supplies4,5791,127
Outside Services4,010
Auto and Truck Expenses3,3612,361
Total Operating Expenses736,885661,584
Income (Loss) From Operations(468,075)(345,551)
Interest Expense(6,601)(1,754)
Interest Income11
Total Other Income (Expenses)(6,601)(1,743)
Total Income (Loss) before Income  Taxes(474,676)(347,294)
Provision for State Income Taxes
NET LOSS(474,676)(347,294)

Perspire Sauna Studio Cash Flows Statement Takeaways

Liquidity is one of the most important measurements of a company’s ability to meet potential cash requirements, including ongoing commitments to repay borrowings, fund business operations, operations, and expansion of franchised restaurant locations. According to the cash flows statement, Perspire Sauna Studio has a $461,257 increase in cash and cash equivalents. At the end of the fiscal year, its total cash and cash equivalents amounted to approximately $598,760. Compared to 2019, there was a $400 thousand increase in cash in 2020. 

2020 2019
Net Loss (474,676) (347,294)
Adjustments to reconcile net loss to net cash provided by (used for) operations:
Amortization 2,142
Changes in assets and liabilities
(Increase) Decrease in:
Accounts receivable (12,535) 3,250
Deferred commision fees (82,050) (56,000)
(Increase) Decrease in:
Accounts payable (5,152)
Credit card payable 18,493 17,972
Deferred revenue 346,500 373,750
Net cash provided (used) by operating activities (204,268) (11,332)
Proceeds from SBA loan (EIDL/PPP) 55,257
Proceeds from Short term loan 130,000
Proceeds from SBA loan 156,998
Borrowings from affiliated companies 325,000
Capital contributions 30,000
Net cash provided (used) by financing activities 461,257 18,668
NET INCREASE IN CASH 137,503 118,835
CASH – BEGGINING 598,760 137,503
Cash paid for interest
Cash paid for taxes 800 800


Investing in a Perspire Sauna Studio franchise is an interesting opportunity especially post COVID-19 outbreak, as there is increasing awareness in the wellness industry. The average entry investment of $466,560 is not relatively low compared to other industries, but it will be worth it to enter the 1.1 trillion industry and the prospects for growth within the industry are huge. Although the company is not performing well during these years, the current franchisees are earning positive income even during the pandemic and have stable profit margins. If you are interested in stepping into the health and wellness industry, Perspire Sauna Studio can be your opportunity!

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