Red Light Method Franchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
Red Light Method is a wellness franchise combining red light therapy with guided workouts for body contouring and recovery. Franchisees run the studios, managing equipment, sessions, and memberships.
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). FranchiseVerdict grade: C (Average), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified · figures per the 2025 FDD issuance
Overview
- Investment
- $199K – $821K
- 36th pct Health & Fitn…
- Avg gross sales
- N/A
- Projection
- Royalty
- 6.0%
- 10th pct Health & Fitn…
- Units
- 4
- 20th pct Health & Fitn…
- SBA charge-off
- N/A
Quick verdict · Health & Fitness · color = vs category peers
Green = favorable by >10% vs Health & Fitness avg · No shading = within ±10% · Red = unfavorable by >10% · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Bottom line
- COSTTotal investment $199K – $821K including a $50K franchise fee, 6.0% ongoing royalty.
- RETURNSItem 19 reports Performance Projection rather than annual gross sales, so unit revenue is not directly comparable.
- RISKVerdict C (Average), verdict score 45/100 (higher is better).
- DATAItem 19 reports Performance Projection rather than annual gross sales, so unit revenue is not directly comparable. Ask franchisees directly for full unit-level revenue.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- Red Light Method Franchising, LLC
- CEO title
- Chief Executive Officer and National Sales Director
- Eric Tepper
- Incorporated in
- Missouri
- HQ
- 9475 Double R Blvd., Suite 11, Reno, Nevada 89521
- Auditor
- ELLSWORTH • STOUT
- Audited financials
- Franchisor revenue
- $27K
- vs $699K prior year
Overview
About
- CEO
- Eric Tepper
- Headquarters
- NV
- Founded
- 2023
- FDD year
- 2025
- States available
- 2
Can you afford it, and what does the money buy?
Entry cost runs 11% below the typical health & fitness franchise.
Source: FDD 2025 · Items 5–7
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
- Top 40% of category vs category
- Liquid capital req'd
- $16K – $51K
- Top 40% of category vs category
- Franchise fee
- $50K – $50K
- Middle of category 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 |
What do units actually make?
Source: FDD 2025 · Item 19
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
Red Light Method did not disclose financial performance in FDD Item 19. The ROIC and return models require Item 19 revenue. Without it all inputs are estimates. You can still run the calculator with your own assumptions by entering an expected revenue figure.
Returns model · single-unit ROIC
What would one Red Light Method unit return on the cash you put in?
Unlevered ROIC · per unit
Estimated return on your total franchise investment, before any debt financing.
41%
Within the 30–60% "attractive franchise" band
These models are for research and scenario planning only. Not investment advice. Actual results depend on your specific location, management, and market conditions. Consult a franchise attorney and accountant before signing any franchise agreement.
Item 19 · Source: 2025 FDD
Financial Performance
Item 19 reports Performance Projection rather than annual gross sales, so unit revenue is not directly comparable. We omit it from rankings.
Operator outlook
What the numbers say
Data-driven interpretation of this brand's financial disclosures, fee structure, and system trajectory.
Fee burden
Total ongoing fee load of 8.0% (near the Health & Fitness average).
Disclosure
Item 19 reports Performance Projection rather than annual gross sales, so unit revenue is not directly comparable.
Operator retention
Net unit growth of +300.0% over 3 years (2 opened, 0 closed).
Source: FDD Item 19 financial performance representations and publicly filed FDD data. Past performance is not indicative of future results. Verify all figures with the franchisor and current franchisees before making any investment decision.
vs Health & Fitness averages
How Red Light Method Compares
Is the system healthy?
Source: FDD 2025 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 4
- Opened
- 2
- Last reporting year
- Closed
- 0
- Terminated
- 0
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 0.0%
- Company-owned
- 2
- Corporate units in the system
- % franchised
- 50%
- vs corporate-owned
- Net growth (3-yr)
- Outlier (see FDD)
- Likely small-sample artifact
- 3-yr CAGR
- Outlier (see FDD)
- Likely small-sample artifact
3-year detail · Item 20
- Opened (3yr)
- 2
- Closed (3yr)
- 0
- Terminated (3yr)
- 0
- Non-renewed (3yr)
- 0
- Transfers (3yr)
- 0
- Reacquired (3yr)
- 0
- Franchisor bought back
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.
Fast growth in a small system. Newer franchisors expanding quickly may not yet have the support infrastructure of larger systems.
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
- N/A
- limited sample (2 loans) — rate not shown below 10
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
- N/A
Explore lender portfolios on Bank Reports or regional data on State Reports.
What could kill this investment?
Source: SBA 7(a) FOIA · FDD Items 3, 21
Risk analysis
FranchiseVerdict rating + FDD Items 3, 4, 8, 16, 21
Risk & Legal
Early-stage franchisor (began 2024) with only 4 units (2 franchised, 2 company-owned) but healthy positive equity $278,443 and net income $585,182 on $699K revenue. No litigation, no bankruptcy, no going-concern; audited and Item 19 disclosed. Limited history is the main concern.
Audited financials (Item 21)
Yes · ELLSWORTH • STOUT
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Score breakdown · what drove the 45 / 100 verdict
- 01MINORStartup: began 2024, 4 units (2 franchised)
- 02MINORPositive equity $278,443, net income $585,182
- 03MINORNo litigation/bankruptcy/going-concern; audited + Item 19
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 8.0% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2025 · Items 11, 12, 17
FDD Items 12, 15, 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 Item 19 in the Red Light Method FDD?
The FDD section where a franchisor may disclose financial performance of its outlets. Disclosure is optional and formats vary; figures are typically gross sales, which is revenue before expenses, not profit. FranchiseVerdict extracts these figures directly from the Red Light Method FDD and qualifies whose outlets they describe.
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 2 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 C-grade franchise with a verdict score of 45 out of 100 (higher is better), 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.
For franchisors
Are you the franchisor?
If you represent Red Light Method, you can request corrections or provide updated information.
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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.