Updated September 5, 2021.
Detailed Estimates of Massage Envy Franchise Costs Based on Item 7 (Estimated Initial Investment) of Massage Envy’s 2021 Franchise Disclosure Document
- The franchisor is unaware of any amounts described below and payable to third-party vendors/suppliers which are refundable, although there are circumstances when landlords will refund a tenant’s security deposit at the end of the lease if the tenant has not defaulted or otherwise damaged the premises.
1. Initial Franchise Fee: $45,000
- The initial franchise fee is $45,000 for your first Massage Envy Business. If this is your second or subsequent Massage Envy Business, your initial franchise fee is $35,000.
- If you qualify under the VetFran program, your initial franchise fee is $36,000 for your first Massage Envy Business and $28,000 for your second or subsequent Massage Envy Business.
- For purposes of the initial investment range, the franchisor has not applied any deductions to the initial franchise fee.
2. Initial Opening Package: $46,000 to $60,000
- Before you open your Massage Envy Business, you must purchase the “Initial Opening Package” from the franchisor’s designated third-party distribution vendor.
- The Initial Opening Package includes:
- (i) most of your initial supplies (including massage lotions, oils, equipment for stretching and skin care services, uniforms, Hot Stone equipment, and certain printed items);
- (ii) all of your initial inventory (retail skin and body care products, essential oils, and gift items);
- (iii) certain of the furniture and fixtures for your Massage Envy Business (including tables, chairs, desks, room equipment, and other items); and
- (iv) your office equipment (excluding computer hardware and software).
- All of these items are purchased through the franchisor’s designated third-party distribution vendor.
- The franchisor estimates that the total payments for the Initial Opening Package will range between $46,000 to $60,000, although the specific amount will vary based on the requirements of your particular Massage Envy Business.
- All amounts paid to the franchisor’s designated third-party distribution vendor for the Initial Opening Package are fully earned when paid and are not refundable under any circumstances.
- The franchisor’s designated third-party distribution vendor pays the franchisor referral fees based on franchisee purchases of the Initial Opening Package and other items offered to franchisees.
3. Computer System: $57,600 to $72,000
- The estimates shown reflect your cost for the purchase and installation of your Dell computer system and related technological equipment.
- For your Massage Envy Business, the low estimate assumes you will have 5 computers and the high estimate assumes you will have 7 computers.
- This estimate also includes configuration installation fees that must be paid to the computer and network hardware supplier (or to the franchisor if it arranges for installation services), as well as telecommunications (voice/internet), payment processing equipment (and related service), phone systems, low-voltage cabling, sound equipment system, surveillance (audio/video) system, sound masking system, digital signage, overhead music, and messaging on hold.
- The estimate also includes the purchase of the required security system that must be operational at each Massage Envy Business.
4. Security Deposits: $6,000 to $10,000
- The estimates shown include average security deposits required by the landlord and utility companies.
- Your security deposit may be more or less depending on several factors including your creditworthiness and the location of your Massage Envy Business. Security deposits will tend to be higher in metropolitan areas like New York City and other large cities.
5. Three Months’ Lease Rent: $11,000 to $29,000
- The estimates shown presume you will lease the premises for your Business, it will be located in a high-end retail shopping center and range in size from 2,300 to 2,800 square feet.
- At least 4 of the Business’s massage rooms will be dual purpose rooms for massage and skin care services.
- 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.
- Rents will tend to be higher in metropolitan areas like New York City and other large cities.
6. Leasehold Improvements: $310,000 to $523,000
- The estimate shown 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 of the 48 contiguous states and whether the premises is located in a metropolitan area, whether there are any existing and comparable leasehold improvements in the premises, the extent and quality of improvements requested by you over and above the franchisor’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 franchisor’s estimate assumes that leased premises already will have pre-buildout attributes like permanent and/or non-support walls, HVAC units, base concrete floors, and utilities.
- Included in the build-out costs are certain build-out materials from the franchisor’s required suppliers. These build-out materials include (but may not be limited to): (i) millwork; (ii) flooring; (iii) artwork; (iv) furniture; (v) lighting; (vi) plumbing and electrical fixtures; (vii) ceiling and gird tile; and (viii) interior signage.
- The franchisor estimates the total payments to its required suppliers for build-out materials will range from $60,000 to $90,000 for Massage Envy Businesses, although the specific amount will vary based on the requirements of your particular Massage Envy Business.
- All amounts paid to required suppliers for the build-out materials are fully earned when paid and are not refundable under any circumstances. The franchisor may receive referral fees from its designated suppliers of build-out materials for their sale of products to Massage Envy franchisees.
7. Signage (excludes interior signage that is part of the building materials included in Leasehold Improvements): $6,000 to $18,000
- This fee range represents from a single sign up to 3 signs.
8. Business Licenses and Permits: $250 to $5,000
- Certain states may require that you file and post a bond if it is determined that your business is considered a health spa.
9. Professional Fees: $7,000 to $30,000
- Massage Envy recommends that you engage an attorney, an accountant, and other consultants to help you in your due diligence activities prior to purchasing a Massage Envy Business.
10. Grand Opening Advertising Program: $15,000
11. Insurance: $10,000 to $35,000
12. Training Expenses: $2,000 to $5,000
- This line-item estimates the travel and living expenses, including airfare, which you will incur when you and your employees attend the franchisor’s initial training programs. It does not include any wage or salary for you or your employees during training.
13. Additional Funds – 3 Months: $42,000 to $65,000
- This line-item estimates the funds needed to cover your initial start-up expenses during the first 3 months of operation (other than the items identified separately in the table). These expenses include payroll costs during this period, but not any draw or salary for you.
- However, this is only an estimate, and you might need additional working capital during the first 3 months you operate your Business and for a longer timeframe afterward.
- These expenses also include the P4 Technology Fees of approximately $1,198 per month, which includes cable-enabled internet service (and may be more if your Massage Envy Business’s premises does not have access to cable-enabled internet service).
14. Total Estimated Initial Investment: $551,850 to $912,000
- Massage Envy relied on its franchisees operating Massage Envy Businesses who opened in the last 24 months to compile these estimates.
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