FDD Talk Daily: Average Revenue of MassageLuXe Spas, By Length of Operating History

Highlights of MassageLuXe’s Item 19 Financial Performance Representations (2012 FDD)

• The franchise offered is a massage therapy spa featuring massage services, together with related services, products, merchandise, and accessories.

• The total investment necessary to begin operation of a MassageLuXe Spa ranges from $195,500 to $371,800. This includes from $124,400 to $170,000 that must be paid to the franchisor or its affiliates.

• If you are signing a Multi-Unit Development (MUD) Agreement, you must pay the franchisor a MUD Fee equal to $76,000 for the first 3 Spas and $19,000 for each additional Spa contracted for under the MUD Agreement.

• If you are signing an Area Development Agreement, the total investment necessary to begin your development operations ranges from $213,000 to $224,600. This includes the $200,300 that must be paid to the franchisor or its affiliates.

Average Revenue of MassageLuXe Spas

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  This financial performance representation is based on information from 4 franchisee-owned Spas and 4 affiliate-owned Spas for the calendar year ending December 31, 2011. The franchisor has only included information from Spas which were in operation for the entire 12 months during this period.

• These 8 Spas represent approximately 53% of the total 15 Spas open for business as of December 31, 2011. Spas that were not in operation for all of 2011 have been excluded from the financial performance representation as their partial year performance is not indicative of the performance you would reasonably expect to see over an entire calendar year.

• The franchisor has also excluded one affiliate-owned Spa because it does not operate in its own stand-alone facility (it shares facilities with one of the franchisor’s affiliate-owned Tanco businesses), has no aestheticians on staff, and fewer rooms than a typical franchised outlet. The franchisor believes these operating differences make the financial performance of this outlet not indicative of the performance you would reasonably expect to see from an outlet that had the typical number of rooms, staff, and store layout.

• The Spas used to compile the information below have been in operation between 1 and 4 years. In addition, 6 of the 8 Spas are located in the St. Louis, Missouri metropolitan area and surrounding communities, where the franchisor has a more concentrated market presence.

• All of the Spas included in this Item 19 are similar in operation to the franchises offered under this disclosure document; however, their are differences. A new franchisee’s results are likely to differ from the results listed below since new Spas commonly experience lower revenues than Spas that have been operating for the number of years of those Salons included in the sample.

• Revenues will also vary from Spa to Spa due to various factors, including the demand for Services, related products and services, the type and number of competitive businesses in the market, advertising efforts, management expertise, location, prevalence of the Marks in the region, and other factors

12-24 Months Operating History