Updated February 17, 2019.

Detailed Estimates of MassageLuXe Franchise Costs Based on Item 7 (Estimated Initial Investment) of MassageLuXe’s 2018 Franchise Disclosure Document

1.  Initial Franchise Fee:  $38,000

• The initial franchise fee for your second and subsequent Spas under a Multi-Development Agreement is $19,000. If you enter into a Multi-Development Agreement, you will pay MassageLuXe an MUD fee, which will be attributed to the initial franchise fee for each Spa when you sign each Franchise Agreement.

2.  Leasehold Improvements:  $201,000 to $278,000

• Costs associated with the build-out for a Spa may vary greatly for newly constructed locations and existing locations requiring modification. MassageLuXe recommends 2,200 to 3,000 square feet for the operation of your Spa.

• These estimates assume a partial build-out allowance from the landlord. Leasehold improvement costs will also be affected by labor costs, local market conditions, local zoning ordinances, age of the location, and other factors.

• These estimates also include an estimated $3,000 Construction Support Fee paid to MassageLuXe.

3.  Signs:  $5,000 to $13,200

• The amounts represent the estimated costs of both outdoor and indoor signage. The amounts exclude sales and use tax.

4.  Spa Equipment and Supplies:  $38,500 to $52,700

• The low estimate reflects the recommended equipment for a Spa with capacity for 6 client rooms. The high estimate reflects the recommended equipment for a Spa with capacity for 13 client rooms.

• These estimated expenses include the cost of 1 hydro water massage bed, massage tables, table warmers, towel and blanket warmers, therapy kits, supplies and equipment for facials, and other related equipment.

• The amounts exclude sales and use tax.

5.  Fixtures:  $29,500 to $35,700

• Fixtures include the costs and installation of millwork (including retail fixtures, shelving, counters), light fixtures, and bathroom fixtures. The amounts exclude sales and use tax.

6.  Furniture and Decor:  $17,000 to $19,000

• The low estimate reflects the estimated cost of furnishing and decorating a Spa with 6 client rooms in accordance with MassageLuXe’s minimum standards. The high estimate reflects the estimated cost of furnishing and decorating a Spa with 13 client rooms, which is beyond MassageLuXe’s minimum standards.

• The amounts exclude sales and use tax.

7.  Initial Pre-Opening Inventory:  $5,500

• The amounts represent the estimated cost of an initial supply of massage lotions, related skincare products, and supplies. The amounts exclude sales and use tax and shipping costs.

8.  Start-Up Marketing:  $7,500 to $10,000

• The low estimate reflects the minimum amount required to be spent for grand-opening marketing of your Spa. The high estimate reflects the cost of additional marketing efforts beyond the required grand-opening marketing that you may choose to do.

9.  Insurance:  $3,000 to $8,000

• Your costs for insurance may vary depending on the insurer, the location of your Spa, the equipment and leasehold improvements, and other factors. This is an estimate of your annual premium for your insurance.

10.  Pre-Paid Rent and Lease Deposits:  $3,000 to $8,000

• Some landlords may require the pre-payment of rent, as well as the payment of a security deposit. The amounts will vary based on the market rental rates for your market.

• If you purchase real estate for the operation of your MassageLuXe Spa, your real estate costs may increase significantly.

11.  Professional Fees:  $8,000 to $10,000

• You may require the assistance of attorneys, accountants, architects, and other professional service providers in establishing your Spa. These amounts may vary depending on the extent of the services required.

12.  Training Expenses:  $3,000 to $5,000

• These amounts represent the average costs of transportation, food, and lodging for 2 to 3 people to attend initial training at MassageLuXe’s corporate office in Fenton, Missouri. These amounts do not include any salary or other compensation you may have to pay these employees during the time they are attending initial training.

13.  Licenses/Bonds:  $100 to $1,000

• These figures may vary greatly depending on the fees charged by local government agencies and bonding companies. A refund of the entire fee or portion of the fees paid for licenses/bonds is subject to the policies of the appropriate government agencies and bonding companies.

14.  Computer Hardware and Software:  $16,400 to $16,900

• These estimated amounts are for the required POS System computer hardware and software, as well as shipping, installation, and set-up. These amounts also include required tablet computers, a cash drawer, an all-in-one printer, and the POS System Software Fee.

15.  Security Systems:  $1,000 to $1,500

• You are required to install a security system at your Spa, which includes the following minimum components: one camera in each of the lobby, break room, hallway, and facing the back door.

16.  Phone and Music Systems:  $1,700 to $1,800

17.  Office Supplies and Other Miscellaneous Expenses:  $3,200 to $3,300

18.  Shipping:  $6,000 to $8,000

• The estimated amounts are for the cost MassageLuXe will invoice you for shipping equipment and other purchased items to your Spa.

19.  Additional Funds – 3 Months:  $25,000 to $50,000

• The Additional Funds reflect additional capital you may need to cover expenses during the initial period of operation of your Spa other than items separately identified above. These expenses include additional rent, payroll costs, benefits, additional inventory requirements, sales and use tax obligations, supplies, etc. but do not include royalty fees or an owner’s draw or salary.

20.  Total:  $412,400 to $565,600

• These figures were based on MassageLuXe’s Old Affiliate Spas’ experiences operating Spas beginning in 2008. There can be no assurance that your experience will correspond with the information presented above.