Red Light MethodFranchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
FranchiseVerdict summary · 2026
A Red Light Method franchise requires a total initial investment of $199K – $821K, including a $50K franchise fee and an ongoing 6.0% royalty[2]. The 2025 FDD does not disclose unit-level revenue (no Item 19). Verdict grade: A. Run a live ROI scan →
Data last verified June 21, 2026 · figures per the 2025 FDD issuance
Overview
- Investment
- $199K – $821K
- 37th pct Health & Fitn…
- Avg gross sales
- N/A
- 59th pct Health & Fitn…
- Royalty
- 6.0%
- 8th pct Health & Fitn…
- Units
- 4
- 21st pct Health & Fitn…
- SBA default
- 0.0%
- system-wide median varies by category
Quick verdict · Health & Fitness · color = vs category peers
Green = >15% above Health & Fitness avg · No shading = within ±15% · Red = >15% below avg · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Started franchising in 2024. Newer systems carry more uncertainty but may offer better territories.
Bottom line
- Total investment $199K – $821K including a $50K franchise fee, 6.0% ongoing royalty.
- No Item 19 financial performance data disclosed. The franchisor chose not to publish revenue figures.
- Verdict A (Top Quintile) with a risk score of 42/100.
- No Item 19 financial performance representation. Without franchisor-disclosed revenue data, you'll need to gather unit economics directly from existing franchisees.
Item 1 · who you're contracting with
The Franchisor
- Legal entity
- Red Light Method Franchising, LLC
- Incorporated in
- MO
- HQ
- 9475 Double R Blvd., Suite 11, Reno, Nevada 89521
- Auditor
- ELLSWORTH • STOUT
- Audited financials
- Franchisor revenue
- $27K
- vs $699K prior year
Overview
About
Red Light Method franchisees operate fitness studios specializing in red light therapy and wellness services. Day-to-day operations include client sessions, equipment maintenance, membership management, retail sales, and studio administration. The business model relies on recurring memberships and class bookings.
- CEO
- Eric Tepper
- Headquarters
- NV
- Founded
- 2023
- FDD year
- 2025
- States available
- 2
FDD Item 7 · 2025 filing
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $50K | $50K |
| Working capital (3–6 mo) | $16K | $51K |
| Equipment, build-out, other | $133K | $720K |
| Total initial investment | $199K | $821K |
Source: Red Light Method 2025 FDD, Items 5 and 7[2]. “Equipment, build-out, other” is computed as total minus disclosed line items above.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $199K – $821K
- Better than avg vs category
- Liquid capital req'd
- $16K – $51K
- Better than avg vs category
- Franchise fee
- $50K – $50K
- Near category avg vs category
- Royalty
- 6.0%
- Gross Sales · typical 6–8%
- Ad fund
- 2.0%
- typical 3–5%
- Total fee load
- 8.0%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 6.0% of gross sales |
| Marketing / ad fund | 2.0% of gross sales |
| Technology fee | $275 |
| Transfer fee | $18K |
| Renewal fee | $8K |
| Total fee load | 8.0% of rev |
Financial Performance
This franchisor did not disclose financial performance representations in Item 19, or our extractor could not parse them.
vs Health & Fitness averages
How Red Light Method Compares
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 4
- Opened
- 2
- Last reporting year
- Closed
- 0
- Turnover rate
- 0.0%
- Company-owned
- 2
- Corporate units in the system
- % franchised
- 50%
- vs corporate-owned
3-year detail · Item 20
- Transfers (3yr)
- 0
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 7 states with active franchisees
The Territory Map
Derived from franchisee contact records. Shows states with at least one current operator. Not where the franchisor is registered to sell new units (that data is re-extracting in a future refresh).
States derived from franchisee contact records (FDD Item 20). Shows states with at least one current operator on file. Full state registration data (Item 12) will appear on a future FDD refresh.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA loan disclosures. This brand has only 2 7(a) loans on file; statistical reliability is limited below 10 loans.
- Total loans
- 2
- Loan volume
- $867K
- Median loan
- $433K
- 50th percentile
- Charge-off rate
- 0.0%
- rates vary by category · see methodology
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- N/A
- 5-yr charge-off
- N/A
- Loans approved 2021+
- Active lenders
- 2
- Defaults
- 0
Explore lender portfolios on Bank Reports or regional data on State Reports.
Premium insight
SBA Lending Report
Deep-dive into Red Light Method's SBA lending history: lender network, geographic footprint, interest rates, and more.
SBA Lending Report
- Principal loss rate and NAICS industry benchmark
- 2 lenders with concentration factor
- Per-state charge-off rates across 2 states
- Startup risk premium and job creation velocity
- 2-year lending trend
Instant access. No subscription.
Risk analysis
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Extremely early-stage franchise with minimal unit count, undisclosed financials, franchisor going concern issues, and high capital requirements create substantial risk of total investment loss.
Audited financials (Item 21)
Yes · ELLSWORTH • STOUT
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Score breakdown · what drove the 42 / 100 rating
- 01MINOROnly 4 units in system with unknown growth trajectory suggests minimal market validation and high failure risk
- 02MINORNo average revenue or net income disclosure (Item 19) prevents ROI assessment and suggests underperformance
- 03HIGHGoing concern status is FALSE, indicating potential financial instability at franchisor level
- 04MEDHigh investment range ($199k-$821k) with no disclosed earnings creates severe ROI opacity
- 05MINORMinimum $2,000 monthly royalty floor regardless of sales creates cash flow pressure for struggling locations
- 06MINOR10-year term is lengthy commitment to unproven concept with only 4 existing franchisees
Severity inferred from the FDD text · not a regulatory classification
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 10 years |
|---|---|
| Renewal term | 10 years |
| Allowed renewalsℹ | 1 |
| Territory type | exclusive |
| Protected territory | Yes |
| Online sales rights | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Non-compete (years)ℹ | 2 years |
| Right of first refusalℹ | Yes |
| Termination notice | 30 days |
| Mandatory arbitration | Yes |
| Jury trial waiver | Yes |
| Governing law | Nevada |
| Litigation count | 0 |
Items 10, 11
Training & Operations
- Classroom training
- 14 hrs
- On-the-job training
- 40 hrs
- POS system
- QuickBooks (accounting), online business management and POS System from a designated Approved Supplier
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: QuickBooks (accounting), online business management and POS System from a designated Approved Supplier
Item 20 · call current owners
Franchisee Contacts
8 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Red Light Method · FDD (2025) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Red Light Method franchise?
The total investment to open a Red Light Method franchise ranges from $199K – $821K, with an initial franchise fee of $50K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Red Light Method franchise owners earn?
Red Light Method does not disclose average franchise owner earnings in their FDD Item 19. Not all franchisors are required to make financial performance representations. We recommend asking existing franchisees directly about their financial experience.
What is Red Light Method's franchise failure rate?
SBA 7(a) loan charge-off data is not available for Red Light Method (fewer than 10 loans on file). Charge-off rates are one way to gauge franchise risk, but not all franchise loans go through the SBA program. We recommend reviewing turnover and closure data in the FDD and speaking with current franchisees.
How many Red Light Method franchise locations are there?
As of their most recent FDD filing, Red Light Method has 4 total units in the United States, including 1 franchised units and 2 company-owned units. 2 new units were opened in the latest reporting year.
Is Red Light Method a good franchise to buy?
FranchiseVerdict rates Red Light Method as a A-grade franchise with a risk score of 42 out of 100, based on our analysis of investment costs, revenue data, SBA loan performance, and growth trends. Our rating is based solely on publicly available FDD and government data; we recommend speaking with current franchisees before making any investment decision. This is not investment advice.
Data sourced from public FDD filings and SBA 7(a) FOIA records. Not financial advice.
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Data extracted from public FDD filings and SBA 7(a) loan disclosures (FOIA). This information is provided for research purposes only and does not constitute financial, legal, or investment advice. Verify all figures with the franchisor's current Franchise Disclosure Document before making any investment decision.