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

by Franchise Chatter on September 21, 2015

in FDD Talk 2017: Service Franchises, Franchise Earnings, Massage Franchise



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Hand and Stone Massage and Facial Spa

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

  • Section I – Background information on the Hand and Stone Massage and Facial Spa franchise opportunity, including relevant news updates
  • Section II – Estimated initial investment for a Hand and Stone Massage and Facial Spa franchise, based on Item 7 of the company’s 2015 FDD
  • Section III – Presentation and analysis of Hand and Stone Massage and Facial Spa’s financial performance representations, based on Item 19 of the company’s 2015 FDD, including information on the:
  • 2014 average gross sales, grouped according to state, for Hand and Stone Massage and Facial Spa franchised businesses that were open 24 months or more as of December 31, 2014
  • 2014 average gross sales for the one subsidiary-owned Hand and Stone Massage and Facial Spa franchised business open more than 24 months as of December 31, 2014
  • 2014 average gross sales, grouped according to state, for Hand and Stone Massage and Facial Spa franchised businesses that were open between 12 months and 24 months as of December 31, 2014

Section I – Background Information

Back in 1977 John Marco volunteered as a physical therapy aide in a local hospital. He was immediately hooked by the healing profession and went on to study physical therapy in college. He practiced as a licensed therapist for the next 25 years.

When he first looked into opening his own massage center, he was surprised to find that in spite of the growing popularity of massage therapy, there wasn’t really a national brand to speak of. In 2004, with the backing of hand picked private investors, he opened his first Hand and Stone location in Toms River, New Jersey.

Within two years he had opened a second location and realized he had a strong enough concept to begin franchising in 2006. By 2009 there were 28 locations and he realized he needed help managing the whole thing. He hired an experienced franchisor to be the CEO of the company and growth became even more rapid.

There are now more than 200 locations throughout the United States, and another 15 in Canada. The chain has been adding 30-50 locations per year since 2011. Here’s how Hand and Stone is making its mark on the health and wellness scene:

More Than Massage

Many people lead incredibly hectic, exhausting lives. They need a break from all of that, which is what massage offers. But why settle just for massage? Hand and Stone has emerged as a leading affordable day-spa chain. In addition to massage, it offers facials and hair removal. Facials have become the chain’s fastest-growing service. Clearly, customers want more than just a great massage.

Capitalizing on Wellness

With the economy still underperforming after the Great Recession, it’s surprising to see that the massage field continues to grow. It’s now a $12 billion industry, having grown by around 13% each year for the past several years.

Convenience

Part of what goes into Hand and Stone’s success is the convenience factor. They’re open 7 days a week with extended hours so customers can take advantage of the chain’s services when it best suits their schedule.

The chain is also strategic when it comes to entering new markets. Hand and Stone aims to open 5 to 10 locations within a given geographic area because with multiple locations, television advertising becomes possible and viewers can be sure to have a Hand and Stone location within easy driving distance.

Membership Model

It was soon after bringing on an experienced franchisor that the company realized it needed to overhaul its approach to membership. Rather than long-term contracts, which represent bigger commitments than many people are willing to make in a struggling economy, the chain has focused on smaller month-to-month subscriptions.

Affordability

Hand and Stone prices its services lower than what you would find at typical spas with similar offerings, often to the tune of 30% less. But that lower price tag doesn’t come with cutting corners on quality, which is a big part of the chain’s continued success.

Section II – Estimated Costs

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

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



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