This post was updated on June 8, 2016 to reflect information from MassageLuXe’s 2016 FDD (Item 7).
Detailed Estimates of MassageLuXe Franchise Costs Based on Item 7 (Estimated Initial Investment) of MassageLuXe’s 2016 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: $50,000 to $169,000
- 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 3,200 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.
3. Signs: $4,500 to $8,000
- The amounts represent the estimated costs of both outdoor and indoor signage. The amounts exclude sales tax and shipping costs.
4. Spa Equipment and Supplies: $37,800 to $50,100
- 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 tax and shipping costs.
5. Fixtures: $33,600 to $39,400
- Fixtures include the costs and installation of millwork (including retail fixtures, shelving, counters), light fixtures, and bathroom fixtures. The amounts exclude sales tax and shipping costs.
6. Furniture and Decor: $19,700 to $22,200
- 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 tax and shipping costs.
7. Initial Pre-Opening Inventory: $9,500 to $11,500
- The amounts represent the estimated cost of an initial supply of massage lotions, related skincare products, and supplies. The amounts exclude sales 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: $2,000 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: $2,500 to $5,000
- 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: $2,000 to $3,000
- 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: $12,500 to $17,000
- These estimated amounts are for the required POS System computer hardware and software, as well as shipping and installation. These amounts also include required tablet computers, a cash drawer, an all-in-one printer, and the POS System Software Fee.
15. Security Systems: $0 to $3,000
- MassageLuXe highly recommends that you install a security system at your Spa.
16. Phone and Music Systems: $1,500 to $2,000
17. Office Supplies and Other Miscellaneous Expenses: $2,500 to $4,500
18. 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, supplies, etc. but do not include royalty fees or an owner’s draw or salary.
19. Total: $215,700 to $449,700
- These figures were based on the experience of MassageLuXe’s affiliate operating a Spa since 2008. There can be no assurance that your experience will correspond with the information presented above.