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Detailed Estimates of Massage Envy Franchise Costs Based on Item 7 (Estimated Initial Investment) of Massage Envy’s 2013 Franchise Disclosure Document
- Since February of 2010, Massage Envy has offered franchises for Massage Envy Spas, traditional Massage Envy clinics (“Traditional Clinics”), and Massage Envy regional developers. Traditional Clinics are substantially similar to Massage Envy Spas, except they do not offer any spa services other than massage therapy. As of February of 2011, Massage Envy is no longer offering franchises for Traditional Clinics, although it may do so in the future.
- Massage Envy is unaware of any fees payable to third party suppliers that are refundable, although some landlords refund security deposits at the end of the lease if the tenant does not default.
1. Initial Franchise Fee: $45,000
- The initial franchise fee is $45,000 for your first Massage Envy Spa. If this is your second or subsequent franchise (regardless of whether your first franchise was a Traditional Clinic or a Massage Envy Spa), your initial franchise fee is $35,000.
- If you qualify under the VetFran program, your initial franchise fee is $40,000 for your first Massage Envy Spa and $32,000 for your second or subsequent Massage Envy Spa.
2. Spa Development Package: $30,000 – $43,000
- Before you open your Business, you must purchase the Spa Development Package from ME Elements. The Spa Development Package includes:
- (i) most of your initial inventory (including massage and facial creams, oils, uniforms, Hot Stone equipment, and printed items);
- (ii) the furniture and fixtures for your business (including tables, chairs, desks, Spa room equipment, and other items);
- (iii) interior signage; and
- (iv) your office equipment (excluding computer hardware and software).
3. Computer System: $28,000 – $38,800
- This amount estimates your cost for the purchase and installation of your Dell computer system and related technological equipment.
- The low estimate assumes you will have 5 computers and the high range assumes you will have 7 computers.
- This estimate also includes a configuration fee that must be paid to the computer supplier as well as $13,500 to $20,800 for telecommunications (voice/internet), phone systems, sound equipment system, surveillance (audio/video) system, sound masking system, overhead music, and messaging on hold.
4. Security Deposits: $5,000 – $7,000
- This includes security deposits required by the landlord and utility companies.
5. Three Months’ Lease: $15,000 – $50,000
- This estimate presumes that you will be leasing the premises for your Business.
- A typical Massage Envy Spa is located in a high end retail shopping center and ranges in size from 2,500 to 3,500 square feet. At least 4 of the facility’s massage rooms will be multi-purpose rooms for massage and facials.
- The expense of leasing will vary, depending upon the size of the premises, its location, landlord contributions, local real estate market conditions, and the requirements of individual landlords.
- The total estimated initial investment shown includes 3 months’ rent.
6. Leasehold Improvements: $137,000 – $535,000
- This estimate does not include any construction allowances that may be offered by the landlord.
- The cost of leasehold improvements will vary widely depending upon:
- the size and condition of the premises;
- if you are located outside the 48 contiguous states;
- whether or not there are any existing and comparable leasehold improvements in the premises;
- the extent and quality of improvements desired by you over and above Massage Envy’s minimum requirements;
- landlord’s cash contribution to the cost of the improvements;
- whether you are required to use union labor, and the like.
- The national average cost per square foot of leasehold improvements is $75.00.
7. Signage (excludes interior signage that is part of the Spa Development Package): $4,000 – $8,250
8. Business Licenses and Permits: $250 – $1,500
- Certain states may require that you file and post a bond if it is determined that your business is considered a health spa. Currently, the states of New Jersey ($25,000 to $50,000 depending on gross income for fiscal year), Iowa ($150,000), Missouri ($10,000 – $25,000 depending on number of unexpired contracts) have the indicated bond requirements for health spas.
- To Massage Envy’s knowledge, no franchisees have been required to post these bonds. However, you should check your local laws to confirm whether you will be required to post such a bond.
- In addition, the city of New York has additional and unique licensing requirements for the opening of a Massage Envy Spa.
9. Professional Fees: $7,000 – $12,000
10. Initial Inventory (excludes initial inventory that is part of the Spa Development Package): $2,500 – $5,000
11. Grand Opening Advertising Program: $15,000
12. Insurance: $3,500 – $5,000
13. Training Expenses: $1,000 – $5,000
- This item estimates the travel and living expenses, including airfare, that you will incur when you and your employees attend the initial training programs. It does not include any wage or salary for you or your employees during training.
14. Collateral Security: $350
15. Additional Funds – 3 Months: $40,000 – $60,000
- This item estimates your initial start-up expenses (other than the items identified separately in the table).
- These expenses include payroll costs during your first 3 months of operation but not any draw or salary for you.
- These expenses also include the $955 configuration and imaging fee for hardware and software, $375 monthly maintenance fee for the Millennium software payable to Massage Envy after you open the Business, and the $5 monthly PCI compliance fee.
- These figures are estimates and you may have additional expenses starting your Business.
16. Total Estimated Initial Investment: $331,485 – $825,623
- Massage Envy relied on its franchisees who have been in operation since August of 2007 to compile these estimates.
1. Royalty: 6% of Gross Sales, payable weekly
2. Marketing Fund Contributions: 2% of Gross Sales, payable weekly
3. Advertising Cooperative Contributions: Established by advertising cooperative members