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Earnings Claims of Top Franchises Revealed

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Franchise Costs: Detailed Estimates of Elements Massage Franchise Costs (2017 FDD)

by Franchise Chatter on September 29, 2015

in Franchise Costs, Massage Franchise

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Elements Therapeutic Massage Exterior

This post was updated on June 18, 2017 to reflect information from Elements Massage’s 2017 FDD.

Detailed Estimates of Elements Massage Franchise Costs Based on Item 7 (Estimated Initial Investment) of Elements Massage’s 2017 Franchise Disclosure Document

1.  Initial Franchise Fee:  $49,500

  • The initial franchise fee for each additional franchise you purchase after the first is $39,500.

2.  Real Property and Utility Security Deposits:  $3,000 to $7,500

  • Studios are typically located in upscale retail areas, and require approximately 1,600 to 2,000 square feet. Estimated monthly lease payments range from $2,700 to $6,700 (including common area maintenance payments) depending on the size, condition, and location of the leased premises.
  • Your landlord may require a security deposit before leasing the premises to you, which is typically equal to one month’s rent. Some utility companies also may require a security deposit before commencing services. The franchisor estimates the total amount of utility security deposits to be approximately $300 to $800.

3.  Leasehold Improvements (net of landlord tenant allowances):  $58,000 to $196,000

  • The cost of construction buildout includes the cost of design and architectural services and services performed by one of the franchisor’s Approved Suppliers for construction services.
  • Typically, costs are higher in large metropolitan areas or if you choose premises with square footage in excess of the high range of 2,000 square feet.
  • The range disclosed in the chart includes the construction management fee you must pay the franchisor in the event it approves an exception to the requirement that you use one of its Approved Suppliers for construction.
  • In addition, the range disclosed in the chart is the range of costs after deducting any landlord allowances (tenant improvements, rent reduction, and the like), which may or may not be granted by your landlord.

4.  Cabinetry and Millwork:  $7,000 to $14,000

  • You must purchase your Studio cabinetry and millwork from the franchisor’s Approved Supplier.

5.  Massage Equipment and Supplies:  $12,800 to $17,200

  • You must purchase from the franchisor’s Approved Suppliers specific massage equipment for the operation of the Studio as detailed by the franchisor in the Operations Manual.
  • The range of estimated costs represents the minimum equipment required to the maximum equipment recommended (depending on the number of rooms in your Studio and the equipment selected).

6.  Furniture, Decor, and Other Equipment:  $13,400 to $20,300

  • You must purchase furniture and decor items for your Studio as specified by the franchisor in the Operations Manual or otherwise. The cost will depend on supplier financing terms (if available), the brands purchased, the quality of the items purchased, and other factors.

7.  Computer Hardware and Software:  $5,800 to $5,900

  • Before opening your Studio, the franchisor typically requires you to purchase 3 computer workstations and related equipment and its designated and other software programs.

8.  Initial Training (travel, meals, lodging, and other expenses):  $1,400 to $4,200

  • You must pay your own transportation, meals, lodging, and any other living expenses for you and any other persons attending the Initial Training.
  • The estimate contemplates attendance by you and 2 other people traveling to the franchisor’s Support Center office in Colorado for approximately 5 days.
  • For each additional person above 3 designated by you to attend Initial Training, you must pay the franchisor a $500 fee, and pay for the additional person’s transportation, meals, lodging, and other living expenses.
  • The estimates do not include any wages or salary you may choose to pay yourself or others while attending Initial Training.

9.  Initial Marketing Spend Fee:  $28,000

  • No later than 10 days after the date that you sign an approved lease for your Studio premises (or no later than 10 days after you sign the Conversion Addendum), you must pay to the franchisor the Initial Marketing Spend Fee of $28,000 by ACH.
  • However, if you purchase an existing Studio, the Initial Marketing Spend Fee will be due no later than 10 days after the date you take possession of the Studio.
  • The Initial Marketing Spend Fee is in addition to your Ongoing Marketing Spend Requirement.
  • The franchisor will use the Initial Marketing Spend Fee to advertise, market, and promote your Studio in accordance with a marketing plan that it determines in its sole discretion.
  • The franchisor may require you to spend the Initial Marketing Spend Fee directly (rather than pay the Initial Marketing Spend Fee to it), and if it so requests, you will advertise, market, and promote your Studio in accordance with an advertising and marketing plan it approves before the opening of your Studio.

10.  Signs:  $5,000 to $12,000

  • The estimate includes the required interior signs and one exterior sign which bear the marks.

11.  Business Licenses and Permits:  $100 to $1,000

  • The cost includes the licenses and permits required to operate a Studio in your location. The license and permit requirements are specific to the state and city/town in which your Studio is located.
  • Certain states may require that you file and post a bond, the estimated cost of which is not included in the table.

12.  Insurance:  $800 to $1,000

  • You must obtain insurance coverage from the franchisor’s Approved Supplier with the limits required by the franchisor as described in the Disclosure Document. Your landlord may require additional insurance.
  • Under the franchisor’s required insurance program, you pay 20% of the annual premium up front and the remaining premiums for the year in equal installments on a monthly basis. The estimate shown in the table reflects the initial 20% payment, which you will pay before your Studio opens.

13.  Miscellaneous Opening Costs:  $3,000 to $4,700

  • This cost includes other start-up costs and expenses (including reasonable pre-opening salary costs for your employees) but does not include any advisor fees or bank financing costs you may incur.

14.  Lease Review Fee:  $1,650

  • When you enter into a letter of intent for the lease of your Studio premises, you will be required to pay the franchisor this fee.
  • The franchisor will charge you only one lease review fee, unless you refuse to sign a lease that it has approved and it is then required to review other leases for the Studio location.

15.  Additional Funds (3 months):  $16,600 to $30,800

  • The range of estimated costs represents your estimated initial start-up expenses (other than the amounts separately identified in the table), which include payroll costs (excluding a draw or salary for you or your manager if you are not the manager), lease payments, marketing expenses, uniform expenses, the costs of supplies, and other operating expenses.

16.  Total Estimated Initial Investment:  $206,050 to $393,750

  • The franchisor relied on its and its affiliates’ many years of business experience in selling and supporting Elements franchises to compile these estimates.
  • The franchisor does not currently finance any portion of the initial investment.

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