FDD Talk 2015: The Massage Heights Franchise Opportunity (Financial Performance Analysis, Estimated Costs, and Other Important Stuff You Need to Know)

In this FDD Talk 2015 post, you’ll learn the following:

• Section I – Background information on the Massage Heights franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a Massage Heights franchise, based on Item 7 of the company’s 2015 FDD

• Section III – Presentation and analysis of Massage Heights’ financial performance representations, based on Item 19 of the company’s 2015 FDD, including information on the:

• 2014 average monthly and yearly gross revenues for the 60 franchised Massage Heights businesses that were in operation for 24 months or longer at the beginning of January 1, 2014 and were operating a Next Generation Retreat

Section I – Background Information

Massage Heights is an up-and-coming chain of massage parlors that got its start back in 2004 in San Antonio, Texas, with husband and wife team Wayne and Shane Evans. The business model is membership-based, which it touts as a more affordable massage option without cutting corners on the quality of its service, which it likens to that of a five-star resort.

The basic monthly membership fee includes a one-hour massage and aromatherapy treatment with a fully-licensed professional therapist (no students).

With more than 119 locations throughout the U.S., the chain is embarking on an ambitious and aggressive growth plan, although it has a long ways to go if it hopes to catch up to Massage Envy with its more than 1,000 locations in the U.S.

Here’s how Massage Heights rubs things the right way:

A Focus on Wellness

The chain calls its locations retreats, emphasizing the relaxing, tension-dissolving benefits of massage. It speaks the right language when it comes to wellness, “Massage Heights elevates the lives of the people we touch by caring for the mind, body and spirit…It is our vision to build a family dedicated to the well-being of the people we serve by investing love and positive energy into everything we do.”

By now most people understand that medical research has shown how regular therapeutic massage helps protect against disease and depression, boosts immune functions, relieves pain, increases alertness, and improves sleep quality, just to name a few benefits.

More Than Massage

In addition to the complimentary aromatherapy treatment with every massage, patrons can also sign on to a monthly facial membership plan which includes a 1-hour custom facial with a licensed, professional skin therapist.

The diversity of offerings is also important. Types of massage offered include Deep Tissue, Swedish, Sports Therapy, Prenatal and Reflexology. The skin treatments available include Anti-Aging, Sensitive Skin, Clear Skin and Brightening.

Other wellness-enhancing add-ons include Reviving Foot Scrub, Revitalizing Face Massage, Hot Stone Therapy, Active Therapy, Skin Enriching, Skin Refining, Skin Purifying and all-natural aromatherapy.

Crossing the Border

In 2014, Massage Heights went international by opening five locations in Canada, with another six in the works. On the domestic side, Massage Heights has been expanding its operations in Florida, Colorado, and Ohio.

Back in 2014 the plan was to hit 300 locations by the end of 2015, but with only about 120 locations at present, that seems like an unrealistic goal.

TV Boost

Massage Heights is still riding a wave of elevated public profile from when its COO and co-founder Shane Evans appeared on the hit CBS show Undercover Boss in December 2013. It’s an Emmy Award-winning reality series that takes high-level corporate executives and has them slip anonymously into the rank-and-file employees of their own companies.

While she was overall pleased with what she saw, concerns also surfaced around making sure the chain’s massage therapists are as well-cared-for as the chain’s guests, both in terms of workload and compensation. Issues were further explored with the formation of a Team Member Development Committee.

Another outcome of the show was the formation of the Massage Heights Family Fund to help employees in crisis.

Section II – Estimated Costs

• Please click here for detailed estimates of Massage Heights franchise costs, based on Item 7 of the company’s 2015 FDD (updated).

Section III – Financial Performance Representations (Item 19, 2015 FDD) and Analysis