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features

Spa franchises : Chain reaction

Spa franchises are taking the industry by storm. In this two-part series, Jane Kitchen takes a closer look at the market and asks which brands are selling the most, how and where they’re growing and who the newcomers are to watch out for

By Jane Kitchen , Spa Business and Spa Opportunities | Published in Spa Business 2016 issue 1

Now in their second decade, spa franchises have made their presence felt in a big way. Their accessibility and affordability have brought spa and wellness to a new audience – one that used to think of massage as a special treat rather than something that could be incorporated into day to day life.

By far the biggest market for franchising globally is the US, where momentum shows no sign of slowing and many brands are set for international expansion. In fact, entrepreneurs and investors are snapping them up faster than you can say ‘deep tissue’.

So who are the bigger players? And which are ramping up their franchise roll outs and worth keeping an eye on?

Massage Envy

With the largest network of massage and facial spas in the US, Massage Envy is the behemoth of franchises, having led the trend when it first emerged 13 years ago.

Owned by Atlanta-based equity firm Roark Capital Group, the brand has more than 1,100 locations in 49 states and US$1bn (€915m, £672m) in earned sales.

Lee Knowlton, SVP of its global franchise sales and international division, says consumers are becoming more proactive when it comes to wellbeing and he doesn’t see a slowdown in the massage franchise industry. He says: “Consumers spend US$5bn-US$7bn a year (€4.6bn-€6.4bn, £3.4bn-£4.7bn) on massage treatments and as they become more educated on why massage and skincare services can be an integral part of their wellness plan, we believe the demand and growth will continue.”

Monthly memberships are US$59.99 (€55, £40) and include one massage, or a Murad facial for US$10 (€9, £7) more. Customers can roll over unused services and add family members at a discounted rate.

When setting up a franchise the range for investments is from US$413,700-US$960,850 (€378,410-€878,890, £277,890-£645,410), depending on the real estate. This includes the initial franchise fee of US$45,000 (€41,160, £30,230). Additional locations taken by a single franchisee are US$35,000 (€32,010, £23,510).

In the US, Massage Envy plans to continue its focus on growing strategically in small and large markets, as well as opening in Wyoming (its 50th state). And it’s not ruling out growth further afield: “Internationally, we see a lot of interest in our brand,” says Knowlton.

There’s international demand for the Massage Envy brand
There’s international demand for the Massage Envy brand
Massage Envy partners with Murad for facials
Massage Envy partners with Murad for facials

One to watch

Marilyn Monroe Spas

Marilyn Monroe Spas has 10 locations across four US states – including several in Hyatt hotels – but received a US$20m (€18m, £13m) investment from JCR Holdings in August, which will be used to fund domestic and global expansion.

The company named James M Lewis, a former Disney and Walmart executive, as CEO last year and as well as heading the expansion, Lewis is set to launch a national beauty school business for the company. Founded by spa industry veteran Niki T Kearn (née Bryan) and former Disney executive Allen R Weiss, Marilyn Monroe Spas was granted an exclusive licensing agreement in 2012 to operate the spa, salon, nail and health concept using Monroe’s name.

There are 10 franchises and a national beauty school will launch to support the expansion
There are 10 franchises and a national beauty school will launch to support the expansion
The chain was granted an exclusive licence to use Monroe’s name in 2012
The chain was granted an exclusive licence to use Monroe’s name in 2012
 Marilyn Monroe Spas received a US$20m investment in august, which will be used to fund domestic and global expansion plans
Marilyn Monroe Spas received a US$20m investment in august, which will be used to fund domestic and global expansion plans

Elements Massage

Based in Colorado, Elements Massage is part of WellBiz Brands. This year, private equity firm KSL Capital Partners – the company that owns Miraval and ESPA International – bought WellBiz for an undisclosed sum.

Elements Massage began franchising in 2006 and today has more than 200 studios in 36 states. In December, it opened its first international location in Vancouver, Canada.

The company offers just one service – massage – and offers The Elements Wellness Program, a month-to-month membership that has 75,000 members. Prices vary by location, but typically cost US$69 (€63, £46) for a 1-hour massage for members.

HAND & STONE

Offering 1-hour massages and 1-hour facials for US$49.99 (€46, £34), plus hair removal, Hand & Stone has more than 250 locations across the US and Canada and was projected to hit US$188m (€172m, £126m) in sales in 2015 – 50.4 per cent up on 2014. The company plans to open another 60 locations in 2016.

Launched in 2004 by physical therapist John Marco, Hand & Stone is now owned by Los Angeles-based equity firm Levine Leichtman, along with franchising veteran Todd Leff, who headed up the US’s two largest auto transmission franchisors before moving into the spa world.

Hand & Stone has built its brand serving the middle market, opening in locations like malls where consumers normally do their shopping.

The company recently partnered with soccer star Carli Lloyd, who will be featured in its marketing.

From cars to spas: owner Leff made his name in automobile franchises
From cars to spas: owner Leff made his name in automobile franchises
US soccer star Carli Lloyd is the new face of Hand & Stone
US soccer star Carli Lloyd is the new face of Hand & Stone
The chain was projected to pass US$188m in sales in 2015
The chain was projected to pass US$188m in sales in 2015

Woodhouse Day Spas

Established by avid spa lover Jeni Garrett in Victoria, Texas in 2001, the Woodhouse Day Spa differs from other franchises in the scope of its treatments – more than 70 – including facials; Vichy showers; Swedish, deep tissue or volcanic hot stone massages; manicures and pedicures.

With 46 locations in 18 states, Woodhouse Day Spas also distinguishes itself by using organic, wild-crafted products; making a commitment to sustainability and using American-made products.

Woodhouse currently has 350 locations under development for the next decade, with plans to open 20-30 new locations each year.

Woodhouse’s USP is its wide range of services
Woodhouse’s USP is its wide range of services

One to watch

Yelo Spa

With licensed locations in New York, San Juan and São Paulo, Yelo Spa is not a traditional franchisor, but Nicolas Ronco, CEO and founder, says he’s spent the past 12 months working on a model that’s fully franchisable.

Founded eight years ago in New York, Yelo has created a model of high-end, city-centre spas offering innovative services such as the Yelocab nap treatment.

With membership starting at US$99 (€91, £67) for a 50-minute treatment (US$133 or €122/£89 without membership), its costs are almost double that of competitors – but Yelo isn’t competing on price. “We went where no other spas wanted to go,” says Ronco. “All of these guys are fighting in the same ocean. We have our own niche.”

Ronco is working with iFranchise to begin franchising this year and hopes to have five locations by 2017 and up to 250 locations in the US in the next five to seven years.

Yelo spa will begin franchising this year - Nicolas Ronco
Yelo spa will begin franchising this year - Nicolas Ronco
Yelo Spa franchises will be high-end with services nearly twice as expensive as rivals
Yelo Spa franchises will be high-end with services nearly twice as expensive as rivals

Massage Heights

Launched in San Antonio, Texas in 2004 by husband-and-wife team Wayne and Shane Evans, Massage Heights has more than 100 locations, with a goal of opening 35 new retreats – as they call them – in 2016. Long-term, the company hopes to have 300 retreats in 20 states by the end of 2018.

“We have been growing rapidly and we are just in the beginning stages,” says Bret Franson, director of franchise development.

Monthly memberships start at US$49.99 (€46, £34), which includes a 1-hour massage and aromatherapy each month. Facial memberships start at US$59.99 (€55, £40) and the company has recently introduced 30-minute targeted massages as well.

Massage Heights is currently searching for a master franchisor in the UK, a country which it wants to target this year.

' We have been growing rapidly and we are just in the beginning stages " - Bret Franson

There are currently 100 Massage Heights in the US, with plans to add 35 more
There are currently 100 Massage Heights in the US, with plans to add 35 more
Massage Heights is looking to grow internationally 
and the UK will be the first country it targets for growth
Massage Heights is looking to grow internationally and the UK will be the first country it targets for growth
Massage Heights is looking to grow internationally
Massage Heights is looking to grow internationally

Massage Green Spa

Massage Green currently has 100 day spas in the US, almost 1,000 more in development and plans to launch in Canada, Europe and Australia.

“I think the spa industry will continue to climb, because making massage therapy affordable allows people to embrace the concept of incorporating it into their lifestyle,” says Allie T Mallad, chair and CEO, who was the world’s largest Little Caesar’s pizza franchisee before founding Massage Green Spa in 2008.

Massage Green offers massages – in 1-hour, 1.5-hour and 2-hour increments – for stress management, pain management and functional mobility, with enhancements of aromatherapy or hot stones. Prices vary per location but start at US$39.95 (€37, £27) for a 1-hour full-body massage.

The company has month-to-month membership and has differentiated itself by allowing up to four people in the same household to use it, and by using green, sustainable materials in its build-out material, says Mallad.

Franchisees pay an initial US$232,000 (€212,210, £155,840) investment and then pay 6 per cent commission on services.

" making massage therapy affordable allows people to embrace the concept of incorporating it into their lifestyle " - Allie T Mallad
Over 1,000 spas are in development
Over 1,000 spas are in development

Jane Kitchen is the news editor of Spa Business and Spa Opportunities

Tel: +44 1462 471929
Email: [email protected]

http://www.leisureopportunities.com/images/SB2016_1chain.jpg
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features

Spa franchises : Chain reaction

Spa franchises are taking the industry by storm. In this two-part series, Jane Kitchen takes a closer look at the market and asks which brands are selling the most, how and where they’re growing and who the newcomers are to watch out for

By Jane Kitchen , Spa Business and Spa Opportunities | Published in Spa Business 2016 issue 1

Now in their second decade, spa franchises have made their presence felt in a big way. Their accessibility and affordability have brought spa and wellness to a new audience – one that used to think of massage as a special treat rather than something that could be incorporated into day to day life.

By far the biggest market for franchising globally is the US, where momentum shows no sign of slowing and many brands are set for international expansion. In fact, entrepreneurs and investors are snapping them up faster than you can say ‘deep tissue’.

So who are the bigger players? And which are ramping up their franchise roll outs and worth keeping an eye on?

Massage Envy

With the largest network of massage and facial spas in the US, Massage Envy is the behemoth of franchises, having led the trend when it first emerged 13 years ago.

Owned by Atlanta-based equity firm Roark Capital Group, the brand has more than 1,100 locations in 49 states and US$1bn (€915m, £672m) in earned sales.

Lee Knowlton, SVP of its global franchise sales and international division, says consumers are becoming more proactive when it comes to wellbeing and he doesn’t see a slowdown in the massage franchise industry. He says: “Consumers spend US$5bn-US$7bn a year (€4.6bn-€6.4bn, £3.4bn-£4.7bn) on massage treatments and as they become more educated on why massage and skincare services can be an integral part of their wellness plan, we believe the demand and growth will continue.”

Monthly memberships are US$59.99 (€55, £40) and include one massage, or a Murad facial for US$10 (€9, £7) more. Customers can roll over unused services and add family members at a discounted rate.

When setting up a franchise the range for investments is from US$413,700-US$960,850 (€378,410-€878,890, £277,890-£645,410), depending on the real estate. This includes the initial franchise fee of US$45,000 (€41,160, £30,230). Additional locations taken by a single franchisee are US$35,000 (€32,010, £23,510).

In the US, Massage Envy plans to continue its focus on growing strategically in small and large markets, as well as opening in Wyoming (its 50th state). And it’s not ruling out growth further afield: “Internationally, we see a lot of interest in our brand,” says Knowlton.

There’s international demand for the Massage Envy brand
There’s international demand for the Massage Envy brand
Massage Envy partners with Murad for facials
Massage Envy partners with Murad for facials

One to watch

Marilyn Monroe Spas

Marilyn Monroe Spas has 10 locations across four US states – including several in Hyatt hotels – but received a US$20m (€18m, £13m) investment from JCR Holdings in August, which will be used to fund domestic and global expansion.

The company named James M Lewis, a former Disney and Walmart executive, as CEO last year and as well as heading the expansion, Lewis is set to launch a national beauty school business for the company. Founded by spa industry veteran Niki T Kearn (née Bryan) and former Disney executive Allen R Weiss, Marilyn Monroe Spas was granted an exclusive licensing agreement in 2012 to operate the spa, salon, nail and health concept using Monroe’s name.

There are 10 franchises and a national beauty school will launch to support the expansion
There are 10 franchises and a national beauty school will launch to support the expansion
The chain was granted an exclusive licence to use Monroe’s name in 2012
The chain was granted an exclusive licence to use Monroe’s name in 2012
 Marilyn Monroe Spas received a US$20m investment in august, which will be used to fund domestic and global expansion plans
Marilyn Monroe Spas received a US$20m investment in august, which will be used to fund domestic and global expansion plans

Elements Massage

Based in Colorado, Elements Massage is part of WellBiz Brands. This year, private equity firm KSL Capital Partners – the company that owns Miraval and ESPA International – bought WellBiz for an undisclosed sum.

Elements Massage began franchising in 2006 and today has more than 200 studios in 36 states. In December, it opened its first international location in Vancouver, Canada.

The company offers just one service – massage – and offers The Elements Wellness Program, a month-to-month membership that has 75,000 members. Prices vary by location, but typically cost US$69 (€63, £46) for a 1-hour massage for members.

HAND & STONE

Offering 1-hour massages and 1-hour facials for US$49.99 (€46, £34), plus hair removal, Hand & Stone has more than 250 locations across the US and Canada and was projected to hit US$188m (€172m, £126m) in sales in 2015 – 50.4 per cent up on 2014. The company plans to open another 60 locations in 2016.

Launched in 2004 by physical therapist John Marco, Hand & Stone is now owned by Los Angeles-based equity firm Levine Leichtman, along with franchising veteran Todd Leff, who headed up the US’s two largest auto transmission franchisors before moving into the spa world.

Hand & Stone has built its brand serving the middle market, opening in locations like malls where consumers normally do their shopping.

The company recently partnered with soccer star Carli Lloyd, who will be featured in its marketing.

From cars to spas: owner Leff made his name in automobile franchises
From cars to spas: owner Leff made his name in automobile franchises
US soccer star Carli Lloyd is the new face of Hand & Stone
US soccer star Carli Lloyd is the new face of Hand & Stone
The chain was projected to pass US$188m in sales in 2015
The chain was projected to pass US$188m in sales in 2015

Woodhouse Day Spas

Established by avid spa lover Jeni Garrett in Victoria, Texas in 2001, the Woodhouse Day Spa differs from other franchises in the scope of its treatments – more than 70 – including facials; Vichy showers; Swedish, deep tissue or volcanic hot stone massages; manicures and pedicures.

With 46 locations in 18 states, Woodhouse Day Spas also distinguishes itself by using organic, wild-crafted products; making a commitment to sustainability and using American-made products.

Woodhouse currently has 350 locations under development for the next decade, with plans to open 20-30 new locations each year.

Woodhouse’s USP is its wide range of services
Woodhouse’s USP is its wide range of services

One to watch

Yelo Spa

With licensed locations in New York, San Juan and São Paulo, Yelo Spa is not a traditional franchisor, but Nicolas Ronco, CEO and founder, says he’s spent the past 12 months working on a model that’s fully franchisable.

Founded eight years ago in New York, Yelo has created a model of high-end, city-centre spas offering innovative services such as the Yelocab nap treatment.

With membership starting at US$99 (€91, £67) for a 50-minute treatment (US$133 or €122/£89 without membership), its costs are almost double that of competitors – but Yelo isn’t competing on price. “We went where no other spas wanted to go,” says Ronco. “All of these guys are fighting in the same ocean. We have our own niche.”

Ronco is working with iFranchise to begin franchising this year and hopes to have five locations by 2017 and up to 250 locations in the US in the next five to seven years.

Yelo spa will begin franchising this year - Nicolas Ronco
Yelo spa will begin franchising this year - Nicolas Ronco
Yelo Spa franchises will be high-end with services nearly twice as expensive as rivals
Yelo Spa franchises will be high-end with services nearly twice as expensive as rivals

Massage Heights

Launched in San Antonio, Texas in 2004 by husband-and-wife team Wayne and Shane Evans, Massage Heights has more than 100 locations, with a goal of opening 35 new retreats – as they call them – in 2016. Long-term, the company hopes to have 300 retreats in 20 states by the end of 2018.

“We have been growing rapidly and we are just in the beginning stages,” says Bret Franson, director of franchise development.

Monthly memberships start at US$49.99 (€46, £34), which includes a 1-hour massage and aromatherapy each month. Facial memberships start at US$59.99 (€55, £40) and the company has recently introduced 30-minute targeted massages as well.

Massage Heights is currently searching for a master franchisor in the UK, a country which it wants to target this year.

' We have been growing rapidly and we are just in the beginning stages " - Bret Franson

There are currently 100 Massage Heights in the US, with plans to add 35 more
There are currently 100 Massage Heights in the US, with plans to add 35 more
Massage Heights is looking to grow internationally 
and the UK will be the first country it targets for growth
Massage Heights is looking to grow internationally and the UK will be the first country it targets for growth
Massage Heights is looking to grow internationally
Massage Heights is looking to grow internationally

Massage Green Spa

Massage Green currently has 100 day spas in the US, almost 1,000 more in development and plans to launch in Canada, Europe and Australia.

“I think the spa industry will continue to climb, because making massage therapy affordable allows people to embrace the concept of incorporating it into their lifestyle,” says Allie T Mallad, chair and CEO, who was the world’s largest Little Caesar’s pizza franchisee before founding Massage Green Spa in 2008.

Massage Green offers massages – in 1-hour, 1.5-hour and 2-hour increments – for stress management, pain management and functional mobility, with enhancements of aromatherapy or hot stones. Prices vary per location but start at US$39.95 (€37, £27) for a 1-hour full-body massage.

The company has month-to-month membership and has differentiated itself by allowing up to four people in the same household to use it, and by using green, sustainable materials in its build-out material, says Mallad.

Franchisees pay an initial US$232,000 (€212,210, £155,840) investment and then pay 6 per cent commission on services.

" making massage therapy affordable allows people to embrace the concept of incorporating it into their lifestyle " - Allie T Mallad
Over 1,000 spas are in development
Over 1,000 spas are in development

Jane Kitchen is the news editor of Spa Business and Spa Opportunities

Tel: +44 1462 471929
Email: [email protected]

http://www.leisureopportunities.com/images/SB2016_1chain.jpg
Movers and shakers in the US spa franchise industry
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Featured supplier: Staycationers treated to whale of a time at newly expanded W Club
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Wattbike AtomX
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Join our tribe. Become powered by Wattbike. Read more
More videos:
Company profiles
Company profile: Myzone Group Ltd
At Myzone we reward Effort to solve the pervasive problem of ‘diminishing motivation within exercisers’ ...
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Company profile: Matrix Fitness
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Catalogue Gallery
Click on a catalogue to view it online
Directory
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Wearable technology solutions
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Harrogate Convention Centre, Harrogate, United Kingdom
Diary dates
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Ericsson Exhibition Hall, Ricoh Arena, Coventry, United Kingdom
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Diary dates
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Diary dates
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Diary dates
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Diary dates
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Diary dates
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Diary dates
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