Full disclosure: I’ve never been to a Massage Envy location. I lived in San Francisco from 2002 to 2008, and there were no Massage Envy locations in the city at that time. I just checked their website, and they still don’t have any in the city.
No big surprise there as retail locations in San Francisco come at a hefty premium and the city government makes it pretty difficult for national chains to open a location in one of the city’s neighborhoods. The nearest locations to San Francisco are in Daly City, Sausalito, and Alameda.
But I’d read about the company very early on, when they still had only a few locations. Boy, how they’ve grown! According to their website, they are now open in 43 states and have awarded a whopping 862 clinics nationwide. They still haven’t arrived in Canada, but I wouldn’t be surprised to see them eventually showing up North of the border.
What initially caught my attention was their innovative business model. They sell annual memberships, pretty much like a gym membership, which entitles the member to one massage per month. Depending on the location, the monthly membership fee is $49 or $59. The member is also entitled to purchase additional massages for $39 or $49 each. That, to me, sounds like an amazing value.
Any unused massage during one month can be rolled over to the next, and members can enjoy their massage at any Massage Envy location nationwide. Members can also freeze their account for 6 months for any reason. The membership can be canceled if the member relocates to an area where there is no Massage Envy within 25 miles, or if the member presents a doctor’s letter. This is sounding better and better.
As a potential customer, I think this is a very affordable and convenient way to get a regular massage. And since the chain specializes in massages, they offer a wide variety of styles to choose from– from Swedish to Reflexology to Deep Tissue and more! You can’t beat that.
And now, they’ve even branched out to facials at their expanded Massage Envy Spa locations. The monthly membership for this service is $59 or $69, again depending on the location, which entitles the member to one facial per month. And the member has the option to purchase additional facials for $49 or $59 each.
If I lived near a Massage Envy, I would definitely give them a try. They offer a special trial price of $39 or $49 for a one-hour introductory massage session.
So, what do I like about the Massage Envy franchise opportunity?
1. Innovative Business Model – Well, the membership model is not exactly new, but in the context of a spa business, it’s almost ground-breaking. They make getting regular massages so affordable and accessible. By providing genuine value to the consumer, I am convinced that Massage Envy is built on a very strong foundation.
2. Impressive Growth – The fact that they were able to open so many locations in such a short period of time tells me that investors who have studied this business opportunity like what they saw and have confidence in the profit potential of the business.
3. Marketing Strength – The sheer number of Massage Envy franchise locations contributing to the chain’s national and regional marketing/ad campaigns is a competitive advantage that simply cannot be matched by an independent spa or even a small chain.
And the fact that they always seem to get mentioned in the press tells me that they either have a very effective Marketing and PR Department or, better yet, there is something about their story that the media simply can’t get enough of.
4. Hot Industry with Huge Growth Potential – The wellness industry is already huge right now and the trend towards self-pampering and relaxation shows no signs of slowing. Massage Envy started out with just massages and now they are expanding the brand to include facials. This can be a significant additional revenue stream for the chain if promoted and executed properly.
What don’t I like about the Massage Envy franchise?
1. Substantial Franchising Fee and Initial Investment – Selfishly, I don’t like the fact that this franchise opportunity is beyond my budget. The franchise fee of $45,000 is pretty steep and the estimated start-up cost — which ranges from $317,490 to $512,220 — is on the high end of non-food service franchises.
The average location is about 3,000 square feet, so the rent expense will be substantial. This is a franchise opportunity that is meant for someone who is very well capitalized and can afford to commit to a significant monthly rent. In my experience, it takes time to build a loyal membership base, so until that happens, the rent expense can hurt.
2. Uncertain Weekday Demand – My other concern is whether there is sufficient weekday business at a typical strip mall location for such a narrowly defined niche. I’m just worried that most of the members will opt to come in sometime during the weekend or after work, and the place will be pretty dead the rest of the time.
But considering that the business model is based on paid annual memberships charged monthly, it shouldn’t really impact the bottom line if there are some slow periods during the day, for as long as it’s not too difficult for members to reserve a time slot that’s convenient for them.
Check out my interview with Elements Therapeutic Massage franchisee, Stephen Stabile of Middleton, MA.
What do you like and don’t like about the Massage Envy franchise opportunity? Are you a current franchisee of Massage Envy? What are your thoughts? Do you work for the Massage Envy franchise organization? Do you want to add anything to the conversation?