Opening a day spa franchise or massage business? Read the facts not the fluffBusiness Opportunities — By Steve Ibach on August 25, 2010 at 12:54 pm
If you are considering opening a day spa franchise you probably already have done your homework and know that day spa and massage businesses are doing well even in this economy. Many Americans have incorporated massage therapy into their health care and fitness plan, and smart entrepreneurs are taking advantage of America’s interest in holistic and natural healing by opening a day spa or massage clinic.
As the President of Kala Group, parent company of the Hawaiian Experience Spa day spa franchises and the Massage Elite spa and massage franchises, I come in contact with many people who want to open their own day spa. Many of these people do not understand the basics of buying a franchise and run the risk of having a big corporate franchisor or broker take advantage of them. Before you decide on buying a franchise make sure you fully understand the points which are summarized below:
- How much money will you make? – Don’t let anyone tell you how much money you will make or mislead you into thinking that you will make what other franchisees say they make. You must evaluate the opportunity on your own as though you were opening the day spa from scratch. Look at prices, costs, and profit margins and estimate for yourself how many clients you will need to make the money you want.
- Will running a franchise be easy. – No. Owning and running a franchise requires just as much work as opening any other type of small business. You will have to commit to the business and work hard. I have had people tell me that they “want something cheap and easy that will make them lots of money”. If that is how you feel give it up now because it is not happening.
- Why even buy a franchise if it is not easy? What you get when you purchase a franchise is support and an established system. This will make many aspects of opening your business much easier and can increase your chances of being successful. However, the time and money you save because the franchisor is helping you must be put back into your business. You should be able to work harder and spend more effective time on customer service, advertising, and running your day spa because the franchisor is helping you with many small details that often bog down new business owners.
- Should I speak with a franchise broker? At first you can speak with franchise broker who represents a company, however, after the initial conversation you sould speak with a principle (owner) of the franchisor. If an owner is not available move on unless you are a seasoned franchise buyer who already understands all the ins and outs.
- Which day spa or massage franchise should I choose? Find something that resonates with you and excites you. Don’t simply choose the biggest and don’t just look at numbers. You will be living the franchise and it is a fact that your changes of succeeding are much better if you love what you are doing and like the people you are working with.
- Is an established franchise like Massage Envy better than a newer one. As I own a newer one I, of course, strongly feel that there are opportunities with a newer franchise. In the day spa industry your customers will be mainly local people. They will not be people driving by who stop in your franchise (like McDonalds) because they are familiar with it. You should look at the business model, price points, uniqueness, and competitive advantages of the day spa franchise. Just because there are 600 nationwide does not mean it will help you in anyway. You can even be hindered by this in many ways as bad news at any franchise with your name gets related to you in people’s minds.
- What is a franchise fee and royalty fee? The franchise fee is usually a one time fee that you pay the franchisor to become part of the system. For a day spa franchise this will typically be $35,000 – $40,000. For that fee you receive training, an operations manual, and the right to use the name and system of the franchisor. You still have to pay for the lease fit out, the equipment, etc. just like any other business you open. Total cost to open a day spa will be around $200,000 or more. The royalty fee is an ongoing fee that you pay (about 5% of sales is typical) to be part of the system. I have found that new business owners often make mistakes that amount to tens of thousands of dollars or more when they open a business and run it on their own. I made these mistakes in my first business, Techtronics Security Company. By using the franchisor’s system and taking advantage of their structure you should actually save money verses going it alone.
Of course, the above is not meant in any way to be a comprehensive review of the complexities of buying a day spa franchise and you should always seek the input of friends, colleagues, and advisors. Remember, owning a franchise can make your dreams come true, but only if you love what you are doing. Find something exciting to you, evaluate it, and give it everything you have.
See the day spa franchise options available through Kala Group.