How to Finance a Loyly Nordic Spa Franchise: The $126K Cash Rule
By Marc Cornella
A Loyly Nordic Spa franchise loan funds a membership-based sauna and cold plunge bathhouse built around Finnish sauna tradition and contrast therapy. The franchisor’s own franchise site estimates startup costs of $525,845 to $712,225 and asks for $126,000 in liquid capital, so most owners combine personal cash with an SBA or conventional loan for the build-out and equipment.
This article covers the concept, the cost figures the franchisor publishes, how the membership model affects underwriting, the brand’s SBA Franchise Directory note about lease documents and the financing options that fit a sauna and cold plunge facility.
US Professional Funding is not affiliated with, sponsored by or endorsed by Loyly Nordic Spa; the name is used only to describe the business. Figures come from the franchisor’s franchise and consumer websites, which reference its Franchise Disclosure Document (FDD), and can change. Confirm every number in the current FDD. Loan programs vary, and every loan is subject to approval. Nothing here is legal, tax or investment advice.
Loyly Nordic Spa Franchise Loan at a Glance
- Concept: a Finnish-style bathhouse offering sauna and cold plunge contrast therapy on a membership basis.
- Estimated startup costs: $525,845 to $712,225, per the franchisor’s summary of Item 7.
- Liquid capital: $126,000, which the franchisor says covers the franchise fee, lease security deposit, loan down payment and working capital.
- Franchise fee, royalty and marketing fees: not published on the franchisor’s public pages; confirm them in Items 5 and 6.
- Revenue model: recurring memberships, packages, buddy pass add-ons and day passes, with a network membership that works across locations.
- Footprint: three locations in Utah listed on the brand’s website, in Orem, downtown Salt Lake City and Midvale.
- SBA Franchise Directory: listed under code S8993, with a note about lease documents when real estate secures the loan.
What Is Loyly Nordic Spa?
Loyly Nordic Spa is a Utah-based sauna and cold plunge concept rooted in the Finnish sauna tradition. The brand’s website describes a large communal Finnish sauna that holds up to 60 guests and 12 individual cold plunge tubs held at different temperatures, so guests can alternate heat and cold at their own pace.
How it works. Members get access without appointments or time limits. The brand sells unlimited monthly memberships, day passes and a network pass that allows visits to any location, which gives owners a recurring revenue base rather than relying on single visits.
Franchising. The franchisor describes itself as selectively partnering with franchise owners and offers the franchise through its FDD. Its public pages do not list the founding year, founders or franchise unit counts, so ask for those details in your discovery process and confirm them in Items 1, 2 and 20 of the FDD.
Why lenders view it the way they do. Lenders like recurring membership revenue, which can make cash flow more predictable once a location matures. They also see a young franchise system, a specialized build-out with heat, water and drainage requirements, and a membership ramp-up that takes time. Those factors put more weight on the owner’s liquidity, location and marketing plan.
Loyly Nordic Spa Franchise Costs
Franchise fee. The franchisor’s public pages do not state the initial franchise fee. Item 5 of the FDD will list it and any multi-unit terms.
Build-out. Converting leased space into a bathhouse is typically the largest cost. A large communal sauna, a cold plunge area, changing rooms, showers, upgraded electrical service, plumbing, drainage, ventilation and moisture-resistant finishes all add to construction costs. Landlord improvement allowances and second-generation space with existing plumbing can make a meaningful difference.
Equipment. Sauna heaters and controls, cold plunge tubs with chillers and filtration, water treatment, lockers, laundry equipment for towels, check-in technology and audio systems make up the equipment package.
Opening costs and working capital. Presale marketing, staff training, opening supplies, insurance and reserves for the months while memberships grow round out the budget. The franchisor’s $126,000 liquid capital figure is meant to cover the franchise fee, lease security deposit, loan down payment and working capital.
Total investment. The franchisor estimates startup costs of $525,845 to $712,225 and points to Item 7 of the FDD for the full breakdown. Its public page does not list the individual line items, so request the table. Expect it to include:
- Initial franchise fee
- Leasehold improvements and construction
- Sauna, cold plunge and water treatment equipment
- Furniture, fixtures, lockers and signage
- Technology and membership software
- Presale and grand opening marketing
- Training and travel
- Lease security deposit, permits and insurance
- Additional funds for the initial operating period
Ongoing Fees and How They Affect Your Loan
Royalty and marketing. The franchisor’s public pages do not list royalty or marketing fund rates. Item 6 of the FDD lists them, along with technology, transfer and renewal fees.
Utilities and maintenance. Heating saunas and chilling plunge tubs makes utilities a meaningful operating cost. Water treatment, filter replacement and equipment servicing are recurring expenses lenders will want to see in the budget.
How lenders factor these in. Lenders deduct royalties, marketing contributions, rent, labor, utilities and maintenance from projected membership revenue to estimate cash flow available for loan payments. For a Loyly Nordic Spa franchise loan, the critical assumptions are presale memberships, the monthly growth rate, member retention and the mix of memberships and day passes. Our article on membership revenue and how lenders view it explains why recurring income matters to underwriting.
Franchisor Requirements for New Owners
Liquid capital. The franchisor asks for $126,000 in liquid capital. It does not publish a net worth requirement on its public pages.
The approval process. The franchisor’s confidential inquiry covers six areas: contact information, desired location, financial qualification, experience, motivation and a final review. The franchisor says applicants typically hear back within a few business days, and a franchise is offered only through delivery of the FDD.
Experience. The inquiry asks about experience, but no specific background is published. Lenders tend to favor management, sales or hospitality experience for membership businesses.
Ways to Own a Loyly Nordic Spa
A new location. Most owners will open a new bathhouse. Financing covers the build-out, equipment, fees and working capital and is underwritten on projections and your capital. See our fitness center start-up financing options.
Multiple locations. Because the network membership allows visits to any location, owning several bathhouses in one market can strengthen the member offer. Ask whether the FDD includes development agreements.
Buying an existing location. In a young system, resales are rare. If one becomes available, the buyer can show a lender actual membership and revenue history, and the franchisor must approve the transfer.
Financing Options for a Loyly Nordic Spa Franchise
SBA 7(a) loans. Because the brand is listed on the SBA Franchise Directory, an SBA 7(a) loan can fund the build-out, equipment, fees and working capital in a single package, subject to approval.
SBA 504 loans. If you buy the building, an SBA 504 loan can finance owner-occupied real estate and long-lived equipment. See the directory note below on lease documents when real estate secures the loan.
Conventional term loans. Owners with strong liquidity may consider a conventional business loan, with terms that vary by lender.
Equipment financing. Sauna heaters, cold plunge tubs, chillers, filtration and laundry equipment can often be financed or leased separately. Learn more about fitness center equipment financing and leasing.
Working capital and lines of credit. Presale marketing, payroll and utilities before memberships reach maturity call for a cash cushion. Our fitness center working capital page explains the options.
Seller financing on resales. If you buy an existing location, the seller may carry part of the price. Seller notes are typically subordinate to the senior loan, and SBA rules may limit them.
SBA Loans for Loyly Nordic Spa Franchisees
The SBA Franchise Directory lists franchise brands whose agreements have been reviewed for SBA eligibility. SBA lenders generally require a listing before making an SBA-guaranteed loan to a franchisee. A listing does not approve any borrower.
Loyly Nordic Spa’s listing. The brand appears under code S8993 with this note: when the real estate where the franchise business is located will secure the SBA-guaranteed loan, the Landlord’s Consent to Assignment and Lease Rider may not be executed.
What that means in plain English. Many franchisors use a lease rider that lets them step into or take over the lease if the franchise ends. That document assumes a landlord leasing space to the franchisee. If you or an affiliated company own the property and pledge it as collateral for the SBA loan, that rider should not be signed, because it could conflict with the lender’s rights in the real estate. For most owners who lease from an unrelated landlord, the note does not change the deal.
Program size. The SBA 7(a) program maximum is currently $5 million, though program rules can change.
SBA application tips. Gather personal tax returns, a personal financial statement, a resume, the franchise agreement, a lease or letter of intent, contractor bids, equipment quotes and a business plan with membership projections. Our article on SBA loans for fitness businesses covers what lenders ask for, and our SBA loan calculator can help with early payment estimates.
How Lenders Evaluate a Loyly Nordic Spa Deal
Personal credit and financial history. Lenders review credit, tax returns and existing debts.
Net worth and liquidity. The franchisor’s $126,000 liquid capital figure includes your down payment and working capital, so lenders will want to see that cash is available and that reserves remain after closing.
Management experience. Experience running a membership, hospitality or service business with staff strengthens a request.
Business plan and projections. Show a presale plan, a realistic membership ramp, retention assumptions, utilities and staffing. Lenders will compare your assumptions with local demographics and competition.
The FDD and franchise agreement. Lenders review fees, the term, renewal and transfer rules and the lease rider. Our article on reading an FDD for financing explains which items matter.
Site and lease. Expect review of the lease term, rent, landlord approval for plumbing and electrical work and any improvement allowance.
Multi-Unit Growth and Development Agreements
A network membership gives multi-location owners an advantage in one market. Once your first location has a membership base, lenders can underwrite its cash flow alongside the next one. Our article on multi-location fitness financing explains how owners structure growth.
Real-World Scenarios
A first-time owner with strong savings. A professional with sales management experience opens one location. An SBA 7(a) loan funds the build-out and equipment, and the owner’s liquid capital covers the down payment and reserves.
An owner who buys the building. A franchisee buys a small commercial building and finances it with an SBA 504 loan. Because the property secures the loan, the lease rider is not signed, consistent with the directory note.
An operator adding a second location. An owner with a mature membership base opens another location nearby, using the first location’s cash flow to support the new loan.
Common Mistakes to Avoid
- Underestimating plumbing, drainage and electrical costs in the build-out
- Assuming mature membership levels in the first months
- Leaving utilities and water treatment out of operating budgets
- Signing the lease rider when you own the real estate securing the SBA loan
- Spending the $126,000 liquidity on the down payment and leaving no reserves
For more pitfalls, read about the fitness center loan mistakes owners should avoid.
Next Steps to Finance Your Loyly Nordic Spa Franchise
Step 1: Complete the inquiry. Submit the franchisor’s confidential inquiry and request the FDD.
Step 2: Review the FDD with advisors. Study Items 5, 6, 7, 10, 17 and 19 with a franchise attorney and accountant.
Step 3: Confirm your capital. Make sure you have the liquid capital plus reserves.
Step 4: Talk with a financing specialist. Compare SBA and conventional options early.
Step 5: Secure a site. Choose a space that can support the plumbing, electrical and drainage needs.
Step 6: Apply and close. Submit your plan, bids and documents, and align closing with presale marketing.
Loyly Nordic Spa Franchise Loan FAQs
How much does a Loyly Nordic Spa franchise cost?
The franchisor estimates startup costs of $525,845 to $712,225.
How much liquid capital do I need?
$126,000, which the franchisor says covers the franchise fee, lease deposit, loan down payment and working capital.
What is the franchise fee and royalty?
They are not published on the franchisor’s public pages. Items 5 and 6 of the FDD list them.
Can I get an SBA Loyly Nordic Spa franchise loan?
The brand is listed on the SBA Franchise Directory under code S8993, so SBA financing can be considered. Every loan requires approval.
What does the SBA directory note mean?
If the real estate where your business operates secures the SBA loan, the franchisor’s landlord consent and lease rider should not be signed.
Can I finance sauna and cold plunge equipment separately?
Yes. Heaters, plunge tubs, chillers and filtration can often be financed or leased separately.
Can a first-time owner qualify?
Possibly, with sufficient liquidity, a solid business plan and relevant management experience.
Can I open multiple locations?
Ask the franchisor about development agreements. The network membership can make several locations in one market attractive.
Does Loyly Nordic Spa offer financing?
The public pages do not describe direct financing. Check Item 10 of the FDD.
Does the FDD include financial performance information?
Review Item 19 of the current FDD to see whether it includes financial performance representations.
Final Thoughts
A Loyly Nordic Spa location combines a specialized build-out with recurring membership revenue. Buyers who budget carefully for construction and utilities, plan a strong presale and keep reserves beyond the liquid capital figure put themselves in a good position to secure a Loyly Nordic Spa franchise loan.
US Professional Funding helps franchise owners and buyers finance start-ups, equipment and working capital. Learn more about our franchise financing and fitness center financing solutions.
