Red Light Method Franchise Cost, Revenue & Review 2026
- Investment
- $199K – $821K
- Disclosed sales
- partial, no system average
- SBA charge-off
- Under 10 loans (2)
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 on file does not yield a unit-revenue figure we can publish. FranchiseVerdict grade: C (Average), an editorial assessment, not investment advice. Run a live ROI scan →
Limited operating history: franchising since 2024. A system this young has fewer than three years of Item 20 outlet history and rarely enough SBA loans for a charge-off rate, so its grade rests on less evidence than an established system's. Read its Item 20 tables and talk to its first franchisees before relying on the grade. Other new franchisors
Sources, dates and evidence
FDD issued: · Data extracted: · Last cited check: · Staleness risk: medium - issued 12 to 24 months ago; a newer filing is likely on file
Evidence: strong✓ Investment (Item 7)✓ Item 19 status✓ Units and owners (Item 20)✗ SBA loan coverage✓ Litigation (Item 3)✓ Financial statements (Item 21)✓ Franchisor identityhow this is scored5 of 5 headline figures on this page cite a page of the filing.
Overview
- Investment
- $199K – $821K
- 37th pct Health & Fitn…
- Avg gross sales
- N/A
- Royalty
- 6.0%
- 13th pct Health & Fitn…
- Units
- 4
- 19th pct Health & Fitn…
- SBA charge-off
- N/A
Quick verdict · Health & Fitness · color = vs category peers
Green = favorable by >10% vs Health & Fitness median · 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 presents hypothetical monthly revenue/expense/net profit projections at 125/275/425 member levels and $150/$175/$200 average monthly membership rates, based on affiliate-operated Studio experience (Bentonville, Reno) plus 2 franchisee reports; not actual historical franchisee results with disclosed sample/quartiles.
- RISKVerdict C (Average), verdict score 45/100 (higher is better).
- GROWTHNegative, pipeline stalled: 13 agreements signed but not yet open against 4 open outlets (Item 20).
- DATAItem 19 does not yield a per-outlet annual revenue figure we can compare across brands. 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
- $699K
- vs $27K 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 30% above 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%
- Set by a formula · 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
No Item 19 revenue figure for Red Light Method is on file. The return models need a revenue figure to start from, and the operating costs that turn gross sales into a profit are in no FDD. Enter your own and the calculator runs on your assumptions — nothing here is modelled until you do.
Returns model · single-unit ROIC
What would one Red Light Method unit return on the cash you put in?
Illustrative category typicals — not sourced to any filing, survey or sample. Replace them with figures from franchisee validation calls before you rely on the output.
Unlevered ROIC · per unit
Your modelled return on total invested capital, before any debt financing.
—
An FDD discloses gross sales, not profit. We hold no sourced figure for annual revenue, COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
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 presents hypothetical monthly revenue/expense/net profit projections at 125/275/425 member levels and $150/$175/$200 average monthly membership rates, based on affiliate-operated Studio experience (Bentonville, Reno) plus 2 franchisee reports; not actual historical franchisee results with disclosed sample/quartiles.
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 median).
Disclosure
Item 19 does not yield a per-outlet annual revenue figure we can compare across brands.
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 medians
How Red Light Method Compares
Category median of published Health & Fitness brands that report the figure; the middle half spans the 25th to 75th percentile and n counts the brands behind it. Medians are used because a few very large systems pull an average far from the typical brand. Revenue is disclosed gross sales, not profit.
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
- N/A
- 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
Last fiscal year · Item 20 exits and transfers
- Terminated
- 0
- Not renewed
- 0
- Transferred
- 0
- Reacquired
- 0
- Franchisor bought back
- Signed, not yet open
- 13
- 3.25 per open outlet · Item 20 Table 5
- Projected new
- 10
- Franchisor's next-year forecast
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.
Where the owners are · Item 20 owner list
8 current owners across 7 states.
- OK 2
- CA 1
- CO 1
- GA 1
- OH 1
- TN 1
- UT 1
Counts only, from the list the franchisor prints in Item 20. Names and phone numbers are for your own due diligence and are not shown here.
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
- Under 10 loans (2)
- Insufficient SBA coverage: 2 loans, rate hidden below 10
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- Under 10 loans (2)
- 5-yr charge-off
- Under 10 loans (2)
- 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.
Litigation (Item 3)
Subject: officers or affiliates. The franchisor is not a named party in these cases.
No litigation disclosed in Item 3.
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · ELLSWORTH • STOUT
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Supplier relationship · Items 8 & 16
- Franchisor sells you products: Yes
- Kickbacks from required suppliers: No
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: No
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 territory |
| Protected territory | Yes |
| Exclusive territoryℹ | Yes |
| Territory sizeℹ | Population-based: approx. 50,000-200,000 in rural/suburban areas; approx. 25,000-100,000 in dense urban areas |
| Online sales rights | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Non-compete (years)ℹ | 2 years |
| Non-compete (miles)ℹ | 5 mi |
| Right of first refusalℹ | Yes |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Curable defaultsℹ | 3 |
| Mandatory arbitration | Yes |
| Arbitration location | Carson City, Nevada |
| Jury trial waiver | Yes |
| Governing law | Nevada |
| Litigation count | 0 |
View Item 3 litigation summary
No litigation disclosed in Item 3.
Items 10, 11
Training & Operations
- Classroom training
- 14 hrs
- On-the-job training
- 40 hrs
- Ongoing training
- Required
- Site selection
- Franchisor approves site chosen by franchisee using demographic software
- Franchisor financing
- Not offered
- Item 10
- 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
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?
Item 19 of the Red Light Method FDD discloses figures for part of the system but no single average across all outlets. These are gross sales figures, not profit; the Revenue section shows what the filing reports and on what basis. Item 20 of the FDD lists current and former franchisees; asking them directly is the standard way to fill this gap.
Who owns Red Light Method?
Red Light Method is franchised by Red Light Method Franchising, LLC. Source: FDD Item 1, 2025 filing.
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). The grade is a deterministic score built from six weighted dimensions — financial health, unit economics, unit growth, scale, legal, and transparency — then calibrated against SBA loan charge-off rates and FDD age. Transparency is one of the six, so a filing that discloses less scores lower on that dimension than one that discloses more. 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
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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.