FDD Talk 2016: The MassageLuXe Franchise Opportunity (Financial Performance Analysis, Estimated Costs, and Other Important Stuff You Need to Know)

In this FDD Talk 2016 post, you’ll learn the following:

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

• Section II – Estimated initial investment for a MassageLuXe franchise, based on Item 7 of the company’s 2016 FDD

• Section III – Presentation and analysis of MassageLuXe’s financial performance representations, based on Item 19 of the company’s 2016 FDD, including information on the:

• 2015 average annual revenue for the 21 franchisee-owned MassageLuXe Spas that were open during the entire 2015 calendar year

• 2015 adjusted average operating results (i.e. revenue, operating expenses, net income) for 6 affiliate-owned MassageLuXe Spas that were operated by the franchisor’s affiliates for the entire 12 months during this period

Section I – Background Information

MassageLuXe Seeks Growth

MassageLuXe is seeking growth across the United States, and looking to expand into Canada. The chain is banking on its membership model, which is designed to keep people coming back on a consistent basis, to deliver consistent revenue.

The company, which has more than 40 locations in 11 U.S. states from coast to coast, provides massages, facials and other services. MassageLuXe International is seeking franchisees within the U.S. and Canada.

Locations are run both by multi-unit developers and single-unit franchisees. The company’s mission is to deliver the highest quality of massage in a comfortable, relaxing, luxurious environment for clients. Franchises use state-of-the-art technology and high-quality products.

Basic massage services offered include Swedish massage, deep-tissue massage, and prenatal massage.

• Swedish massage, the most common type of massage therapy in the U.S., is ubiquitous enough that it is often referred to simply as massage therapy. This type of therapy, which uses massage lotion, incorporates long, smooth strokes, kneading, and circular movements, concentrating on superficial layers of muscle. These massages are designed to be gentle and relaxing. Swedish massages are a good introduction to massage therapy.

• Deep tissue massage focuses on deeper layers of muscles and connective tissue. Strokes and friction techniques are slower and go across the grain of the muscles. This type of massage eases chronically painful or tight muscles, repetitive strain, recovery from injury, or problems with posture. Those who receive deep-tissue massages often feel sore for a day or two afterward.

• Prenatal massage continues to grow in popularity among pregnant women, who must be past their third trimester. Techniques are modified for a pregnant woman’s body, and therapists certified in prenatal massage are trained in how to position and support the body of a woman who is pregnant. Massage is customized to individual needs. Benefits include less stress, decrease in swelling, relief of aches and pains, and reduction in anxiety and depression.

Also available are hot-stone massage, which brings in hot stones into Swedish or deep-tissue massage; aromatherapy massage, which adds one or more essential oils to the massage; and reflexology, which involves pressure applied to specific points on the hands and feet and can ease stress and anxiety in the body. It can be added to full-body deep-tissue or Swedish massages sessions.

LuXeFacials include a Pore Defining Facial, which deep cleanses and rebalances oily or combination skin; Seaweed Facial, which uses pure, fresh European seaweed to help rejuvenate, tone and firm skin; and Glyco Peel and Reveal, which helps remove dead skin cells, smooth the skin, balance complexion, and address sun damage, uneven skin tone, wrinkles and scarring.

VIP Facials feature several premiere facials: 4 Layer Facial; Hydra Medic Facial; Vita Cure; Biolight Facial; Microdermabrasion Facial; and Hydra 4 Red-Out Facial.

Massage Luxe has three membership levels:

• LuXe Membership provides a one-hour standard massage session or LuXe facial session each month.

• Epic Membership includes a two-hour massage session, a one-and-a-half-hour specialty massage session, or a FaceLuXe VIP Facial/Microdermabrasion.

• Corporate membership includes a one-hour massage session or a one-hour LuXe facial, with no enrollment fee.

Members get unlimited 15-minute daily HydroLuXe dry water massage sessions and receive 15 percent off products and waxing services. Services are valid at all MassageLuXe locations.

Section II – Estimated Costs

• Please click here for detailed estimates of MassageLuXe franchise costs, based on Item 7 of the company’s 2016 FDD (updated).

Section III – Financial Performance Representations (Item 19, 2016 FDD) and Analysis