Updated April 27, 2019.
Detailed Estimates of Elements Massage Franchise Costs Based on Item 7 (Estimated Initial Investment) of Elements Massage’s 2019 Franchise Disclosure Document
1. Initial Franchise Fee: $39,900
- When you sign a Franchise Agreement to develop a single Studio, you must pay to the franchisor an Initial Franchise Fee of $39,900. You must pay the Initial Franchise Fee as a lump sum by wire transfer. The Initial Franchise Fee is fully earned by the franchisor when paid by you.
- If you are signing the Franchise Agreement under an Area Development Agreement under which you or your affiliate previously paid a Development Fee, then you may not be required to pay an Initial Franchise Fee at the time you execute the Franchise Agreement.
2. Real Property and Utility Security Deposits: $3,000 to $7,500
- Studios are typically located in upscale retail areas, and require approximately 1,300 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): $96,000 to $193,000
- 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 $15,000
- You must purchase your Studio cabinetry and millwork from the franchisor’s Approved Supplier.
5. Massage Equipment and Supplies: $16,300 to $22,900
- 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: $12,400 to $20,600
- 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: $5,700 to $6,500
- 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): $1,350 to $4,050
- You must pay your own transportation, meals, lodging, and any other living expenses for you and any other persons attending the Initial Training.
- Part of Initial Training also includes the requirement that you (or your owners) and the other attendees of Initial Training experience a massage session, and you will be required to pay for that massage session.
- If you and your trainees attend a massage session at a Studio owned by the franchisor or its affiliate, you will pay the franchisor or affiliate approximately $69 to $99 per trainee. The franchisor anticipates most franchisees will send up to 3 trainees, and in that case the fee payable to it or its affiliate would be $207 to $297.
- The estimate contemplates attendance by you and 2 other people traveling to the franchisor’s Support Center office in Colorado for approximately 5 days.
- The estimates do not include any wages or salary you may choose to pay yourself or others while attending Initial Training.
- In addition, before you open your Studio for business, the franchisor may offer you the opportunity to attend non-mandatory training at a franchisee-owned Studio that the franchisor has certified as a “Certified Training Studio.”
- If you elect to attend training at a Certified Training Studio, you will pay the franchisor a fee of $500 per trainee. The franchisor expects to transfer some portion of this fee to the franchisee who conducts the training.
9. Grand Opening Spend Fee: $15,000
- No later than 10 days after the date that you sign an approved lease for your Studio premises (or 10 days after the date you purchase an existing Studio), you must pay to the franchisor the Grand Opening Spend Fee of $15,000 by ACH.
- The Grand Opening Spend Fee is in addition to your Local Marketing Spend Requirement.
- The franchisor will use the Grand Opening 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 Grand Opening Spend Fee directly (rather than pay the Grand Opening 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: $1,000 to $1,300
- 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: $3,200 to $4,900
- 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. Additional Funds (3 months): $19,400 to $30,700
- 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.
15. Total Estimated Initial Investment: $225,350 to $374,350
- 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.