How to Finance a Sauna House Franchise: Communal Bathhouse Costs
By Marc Cornella
A Sauna House franchise loan pays for something very different from a typical retail studio: a communal bathhouse with traditional saunas, cold plunge pools, heated lounge seating, showers and private suites. That mix of wet-area construction, heavy heating and chilling equipment and a membership-driven revenue model shapes how much you need to borrow and how a loan is structured.
US Professional Funding is not affiliated with, sponsored by or endorsed by Sauna House; the name is used only to describe the business. Figures from the franchisor’s Franchise Disclosure Document (FDD) can change, loan programs vary, and every loan is subject to approval. Nothing in this article is legal, tax or investment advice; review the current FDD with a franchise attorney and an accountant before you sign anything.
Sauna House Franchise Loan at a Glance
- Concept: a modern Nordic-style bathhouse built around the brand’s Hot-Cold-Relax circuit of sauna, cold plunge and rest.
- Core services: a two-hour Thermal Cycle in the communal bathhouse, 60-minute massage therapy, and private sauna, plunge and infrared experiences at select locations.
- Revenue model: memberships, punch cards, drop-in visits and gift cards.
- Franchising: the company announced in 2023 that it would begin franchising and partner with local operators; its Bonita Springs, Florida bathhouse is described as the first Sauna House franchise.
- Markets: the company lists bathhouses in Raleigh, Durham and Charlotte, North Carolina; Knoxville, Tennessee; Greenville and Summerville, South Carolina; Bonita Springs, Florida; and Austin, Texas.
- Fees and investment: the franchise fee, royalty, marketing contribution and Item 7 investment range are not published on the company’s own website; get them from the current FDD.
- SBA Franchise Directory: listed under code S7710, with a note about the Lease Addendum when real estate secures the loan (explained below).
What Is Sauna House?
Sauna House began in Asheville, North Carolina, as a single bathhouse built to bring the tradition of communal sauna bathing into a modern setting. Founder and CEO Andrew Lachlan built the brand around community, sustainability and inclusivity, and the company pledges 1% of franchise fees to environmental causes.
The guest experience centers on contrast therapy. Guests shower, then rotate between hot saunas, cold plunge pools and heated rest areas during a timed Thermal Cycle. Bathhouses are device-free, serve tea, kombucha and zero-proof drinks, and offer private rooms for small groups, private infrared cabins and massage therapy.
How lenders see the brand. Sauna House is a young franchise system with a small but growing footprint, a mix of corporate and franchised bathhouses and a concept that sits between a spa, a fitness amenity and a social venue. Lenders will look closely at the operator’s management experience, the strength of the trade area and how realistic the membership ramp-up is, because the brand does not yet have a long franchise operating history to lean on.
Sauna House Franchise Costs
Item 5 of the FDD lists the initial franchise fee, Item 6 lists ongoing fees and Item 7 estimates the total initial investment. Because the company’s website does not publish these numbers, your first step is to request the current FDD and build your budget from it.
Initial franchise fee
The fee is paid when you sign the franchise agreement. Check Item 5 for the amount, whether multi-territory deals carry a different fee, and whether any part is refundable. Many buyers pay the fee from cash, though it can be included in a total project loan.
Real estate and build-out
This is the largest and most variable cost. A bathhouse needs plumbing for showers and plunge pools, floor drains, waterproofing, heavy electrical service for sauna heaters and chillers, ventilation and humidity control, and finishes that stand up to constant moisture. Expect the lease or purchase terms, the condition of the building and local code requirements to drive much of the spread in the Item 7 range.
Equipment and FF&E
Equipment includes traditional sauna rooms and heaters, cold plunge pools with chilling and filtration systems, private infrared cabins where offered, heated lounge furniture, lockers, shower fixtures, massage tables, a reception desk and booking and point-of-sale technology.
Opening costs and working capital
Before opening, you hire and train front-desk staff, bath attendants and licensed massage therapists, buy linens and retail inventory, and run pre-sale marketing for memberships. Item 7 typically includes a line for additional funds during the first months; treat it as a minimum.
Total investment
When you review Item 7, expect line items such as:
- Initial franchise fee
- Leasehold improvements, plumbing, waterproofing and electrical work
- Sauna rooms and heaters
- Cold plunge pools, chillers and filtration
- Private suites and infrared cabins
- Furniture, fixtures, lockers and showers
- Signage and decor
- Booking software, computers and point-of-sale systems
- Linens, supplies and opening inventory
- Training travel and expenses
- Grand-opening and membership pre-sale marketing
- Deposits, permits and licenses
- Additional funds for the initial operating period
Ongoing Fees and How They Affect Your Sauna House Franchise Loan
Item 6 lists the royalty, brand or marketing fund contribution, technology fees, transfer and renewal fees and any required refresh or remodel obligations. Each of these comes off the top before cash is available for loan payments.
Lenders build a cash-flow model that starts with projected membership, drop-in and massage revenue, then subtracts rent, payroll, utilities, royalties and marketing. Utility costs deserve special attention here: running sauna heaters and plunge chillers for long operating hours is energy-intensive, and an optimistic utility estimate can quietly erode debt-service coverage.
Franchisor Requirements for New Owners
The company says it interviews prospective partners and looks for owners who align with its commitments to communal wellness, sustainability and inclusivity. Candidates apply online and join a group webinar before moving forward. Minimum net worth and liquid capital requirements are not published on the company’s website, so confirm them directly with the franchisor and in the FDD.
Lenders will run their own review in parallel. Having your financing conversations early helps you confirm that your cash and borrowing capacity match the franchisor’s expectations before you commit to a territory.
Ways to Own a Sauna House
A new bathhouse. Most current growth is new development. A start-up loan funds construction, equipment and pre-opening costs, and the lender relies on your projections, experience and site. See our page on franchise start-up financing.
An existing location. As the system matures, franchised bathhouses may come up for sale. A Sauna House franchise loan for a resale lets the lender underwrite actual membership and revenue history, subject to franchisor approval under the transfer terms. Our article on buying a franchise resale covers the process.
Multiple territories. The company has sold multiple territories to single ownership groups. Multi-territory deals require a development plan and a financing strategy for each opening.
Financing Options for a Sauna House Franchise
SBA 7(a) loans. Because the brand is listed on the SBA Franchise Directory, eligible buyers can apply for an SBA 7(a) loan to fund the franchise fee, build-out, equipment and working capital in one package.
SBA 504 loans. If you buy or build the building, an SBA 504 loan can finance the real estate and long-lived improvements.
Conventional term loans. Buyers with strong collateral and experience may consider conventional business loans, which can offer more flexibility in structure.
Equipment financing. Sauna heaters, plunge pools, chillers, infrared cabins and heated lounge furniture can be financed or leased separately, which reduces the size of the main loan. Learn more about franchise equipment financing and leasing.
Working capital and lines of credit. Membership revenue builds over time, and wellness demand can shift with the seasons. A line of credit helps cover payroll and utilities during the ramp-up. See franchise working capital.
Seller financing on resales. A selling owner may carry part of the price on a resale. Seller notes are typically subordinate to the senior loan, and SBA rules may limit how they are structured.
SBA Loans for Sauna House Franchisees
The SBA Franchise Directory lists brands whose franchise documents have been reviewed so franchisees can use SBA-guaranteed loans without a separate eligibility review of the franchise agreement.
The brand’s listing and its note. Sauna House appears under code S7710 with this note: when the real estate where the franchise business is located will secure the SBA-guaranteed loan, the Lease Addendum may not be executed. In plain English, the brand’s documents include a Lease Addendum designed for leased locations. If you own the property and pledge it as collateral for the loan, that addendum should not be signed, because there is no landlord lease for it to modify.
Program limits. The SBA 7(a) program maximum is currently $5 million, though program rules can change. Use our SBA loan calculator to estimate payments on different loan amounts.
Application tips. Prepare the FDD, a signed or draft lease, construction bids, equipment quotes, a personal financial statement, tax returns, a resume and monthly projections. Our article on financing an emerging franchise explains how lenders approach younger systems.
How Lenders Evaluate a Sauna House Deal
Personal credit and financial history. Expect a review of your credit report, tax returns and personal financial statement, along with a personal guarantee.
Net worth and liquidity. Lenders want to see that you can make your equity contribution and still keep reserves after opening.
Management experience. Experience running a spa, gym, hospitality venue or multi-employee service business strengthens the application. Explain who will manage day-to-day operations and staffing for massage therapists.
Business plan and projections. Show a month-by-month membership ramp, drop-in and private-suite revenue, massage bookings, utility costs and staffing levels. Explain how you will fill weekday and off-peak hours.
The FDD and franchise agreement. Lenders review Items 5, 6, 7 and 17 and want to see the territory terms. Review Item 3 and Item 4 of the FDD as part of your own due diligence. Our article on reading the FDD for financing walks through the key items.
Site and lease. Bathhouses need space that can handle plumbing, drainage and electrical loads. Lenders want a lease term that covers the loan period, along with landlord approval for the build-out.
Historical financials for resales. For an existing bathhouse, expect a review of membership counts, revenue trends and tax returns.
Bathhouse Equipment and Build-Out Deep Dive
The equipment in a Sauna House is what makes the experience work, and it is also what makes the build-out more complex than a typical studio.
- Sauna rooms: traditional heaters, wood interiors and ventilation sized for communal use.
- Cold plunge pools: chilling, filtration and sanitation systems that must meet local health codes.
- Private suites: rooms for small groups and private infrared cabins at select locations.
- Rest areas: heated lounge furniture and quiet spaces for the relax phase.
- Showers and locker rooms: waterproofed, durable spaces sized for peak traffic.
- Mechanical systems: upgraded electrical service, water heating, dehumidification and HVAC.
Because much of this equipment has a long useful life, it can be financed over a longer term, which helps keep monthly payments manageable.
Multi-Unit Growth and Development Agreements
If you sign for more than one territory, the development schedule sets when each bathhouse must open. Lenders typically finance one location at a time, and they want to see the first unit performing before they fund the next. See our article on multi-unit franchise financing.
Real-World Scenarios
The wellness professional. A buyer with years in the local wellness community partners with two operations-minded investors. Their combined experience and capital support an SBA 7(a) package for a leased bathhouse.
The property owner. A buyer purchases a building and plans to pledge it as collateral. They work with an SBA 504 structure and confirm that the Lease Addendum does not apply.
The resale buyer. An investor buys an existing bathhouse with membership history. The lender relies on actual revenue, and the seller carries a small subordinate note.
The territory developer. A group signs for several territories, opens the first with a term loan and equipment financing, then returns for funding on the second once the first is established.
Common Mistakes to Avoid
- Underestimating plumbing, waterproofing and electrical costs.
- Using optimistic utility costs for heaters and chillers.
- Assuming memberships will fill quickly without a pre-sale plan.
- Signing a lease before confirming the space can support wet areas.
- Skipping a working capital reserve for the ramp-up period.
Read more in our article on franchise loan mistakes.
Next Steps to Finance Your Sauna House Franchise
Step 1: Request the FDD. Review Items 5, 6, 7 and 17 with an advisor.
Step 2: Confirm the franchisor’s requirements. Ask for the net worth and liquidity minimums.
Step 3: Evaluate sites. Look for spaces that can handle plumbing and electrical loads.
Step 4: Gather bids. Collect construction and equipment quotes.
Step 5: Build projections. Model membership ramp-up, utilities and staffing.
Step 6: Apply for financing. Submit your package and compare SBA and conventional structures.
Sauna House Franchise Loan FAQs
How much does a Sauna House franchise cost?
The total investment is disclosed in Item 7 of the FDD. Build-out and equipment for wet areas are the biggest drivers of the range.
What is the franchise fee?
The franchise fee is listed in Item 5 of the FDD. The company’s website does not publish it.
What royalty does Sauna House charge?
Royalty and marketing fees are disclosed in Item 6 of the FDD.
How much liquid capital and net worth do I need?
The franchisor sets its own minimums. Confirm them during the discovery process.
Can I get an SBA loan for a Sauna House franchise?
Yes. The brand is listed on the SBA Franchise Directory under code S7710, and eligible buyers can apply, subject to approval.
What does the SBA directory note mean?
If real estate you own secures the SBA loan, the brand’s Lease Addendum should not be signed.
Can I finance sauna and plunge equipment separately?
Yes. Heaters, plunge pools, chillers and infrared cabins can be financed or leased.
Can I buy an existing Sauna House?
Yes, if one is available and the franchisor approves the transfer.
Do I need spa experience?
The company focuses on mission alignment, but lenders favor relevant management experience.
Can I open more than one bathhouse?
Yes. The company has sold multiple territories to single groups under development schedules.
Does Sauna House offer financing?
Check Item 10 of the FDD for any franchisor financing.
How long is the franchise term?
Item 17 of the FDD sets out the term, renewal and transfer conditions.
Final Thoughts
A Sauna House franchise loan funds a specialized bathhouse with heavy mechanical systems and a membership business that takes time to build. Buyers who get the FDD early, budget fully for wet-area construction and keep a strong working capital reserve put themselves in the best position.
US Professional Funding helps franchise owners and buyers finance start-ups, acquisitions, equipment and working capital. Learn more about our franchise financing solutions.
