Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

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Considering an Elements Massage Franchise? Don’t Overlook These 26 Important Franchise Fees

by Franchise Chatter on June 20, 2017

in Franchise Fees, Massage Franchise



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Don't Invest in a Franchise Until You Check Out This List

Elements Therapeutic Massage Exterior

If you are considering an Elements Massage franchise, don’t get blindsided by these 26 important franchise fees (from the initial franchise fee, to the royalty fee, to 24 other fees found in Items 5 and 6 of Elements Massage’s 2017 FDD).

1.  Initial Franchise Fee:  $39,500 to $49,500

  • When you sign the Franchise Agreement, you must pay Elements Massage an initial franchise fee of $49,500.
  • If this is your second or subsequent Franchise Agreement, you must pay Elements Massage an initial franchise fee of $39,500.
  • If you enter into multiple Franchise Agreements at the same time, and become eligible for the reduced franchise fee of $39,500 for each Franchise Agreement after your first Franchise Agreement, your total initial franchise fees will be allocated equally among all the Franchise Agreements you purchase.
  • Elements Massage offers a veterans and active-duty military discount of $10,000 for the first franchise you purchase if you are a veteran or an active-duty member of the military.
  • If you are signing the Conversion Addendum described in Item 1, you must pay Elements Massage 50% of the then-existing initial franchise fee (currently 50% of $49,500) when you sign the Franchise Agreement. At the time you convert your existing business to a Studio, you must pay Elements Massage the balance of the initial franchise fee.
  • You will have 180 days to convert your existing business into a Studio; however, you will pay royalties on your gross receipts that accrue beginning on the date on which your Franchise Agreement is fully executed by you and Elements Massage.
  • If you fail to convert your business into a Studio within this time period, Elements Massage will have the right to terminate your Franchise Agreement and retain the non-refundable initial franchise fee.
  • The initial franchise fees must be paid to Elements Massage as a lump sum in the form of a cashier’s check or wire transfer at the time the Franchise Agreement is signed.
  • All initial franchise fees are fully earned by Elements Massage when paid by you and are not refundable under any circumstances.
  • Elements Massage reserves the right to waive or reduce the initial franchise fee for other franchisees. In the fiscal year ended December 31, 2016, Elements Massage received initial franchise fees in amounts ranging from $0 to $49,500.

2.  Set-Up and Technology Fees:  $499

  • You are required to pay Elements Massage a $499 set-up fee for the set-up of certain required software programs. You are also required to pay Elements Massage a $75 fee for gift card program set-up and the technology fee for the 2 months before opening ($375 per month).

3.  Construction Management Fee:  $5,000



  • If Elements Massage approves an exception to the requirement that you use one of its Approved Suppliers of construction services, you are required to pay Elements Massage a construction management fee of $5,000.

4.  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 Elements Massage a $1,650 lease review fee.
  • Elements Massage will charge you only 1 lease review fee, unless you refuse to sign a lease that Elements Massage has approved and it is then required to review other leases for the Studio location.

5.  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 Elements Massage, by ACH, $28,000 as a non-refundable initial marketing spend fee (the “Initial Marketing Spend Fee”).
  • 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.

6.  Royalty:  6% of gross receipts

  • Due Date:  5th day of each month.

7.  Default Fee:  $250

  • Due Date:  Upon receipt of statement.

8.  Dishonored Check or Insufficient Funds Fee:  $150



  • Due Date:  Upon receipt of statement.

9.  Defense or Enforcement Costs:  all costs, including attorneys’ fees (variable)

  • Due Date:  Upon settlement or conclusion of a claim or other legal action.

10.  Indemnification:  all costs, including attorneys’ fees (variable)

  • Due Date:  Upon settlement or conclusion of a claim or other legal action.

11.  Collection Costs:  actual costs to collect past due or other amounts

  • Due Date:  Upon settlement or conclusion.

12.  Default Operation Costs (in event of your default):  up to $5,000 per month

  • Due Date:  1st day of each month upon occurrence.

13.  Royalty Underpayments (audit):  varies; difference between amount reported and correct amount, plus 12% of such amount; and if understated amount is more than 2%, plus Elements Massage’s costs (including attorneys’ and accountants’ fees)

  • Due Date:  Time of audit.

14.  Supplies or Supplier Approval:  $100 per hour

  • Due Date:  Upon request.

15.  Technology Fee:  $375 per month; additional $7.50 per month per email user in excess of 4

  • Due Date:  1st day of each calendar month.

16.  Computer Hardware and Software Upgrades:  varies depending on requirements, but typically $100 to $10,000 per upgrade

  • Due Date:  At time of upgrade.

17.  Extension Fee:  $7,500

  • Due Date:  At the time Elements Massage grants an extension to open your Studio.

18.  Marketing Fund:  greater of 2% of gross receipts or $500 per month

  • Due Date:  5th day of each calendar month.

19.  Ongoing Marketing Spend Requirement:  $3,500 per month

  • Due Date:  Beginning on the 90th day after your Studio first opens for business (or, if you are purchasing an existing Studio, on the 90th day after you take possession of the Studio).

20.  Marketing Cooperatives:  as established (existing marketing cooperatives charge $500 to $1,500 per month)

  • Due Date:  As established.

21.  Training (refresher):  Elements Massage may require a $500 fee and you must pay all costs for travel, meals, lodging, and other expenses

  • Due Date:  If a fee is payable, before attendance at training program; costs and expenses as incurred.

22.  Insurance:  varies by coverage and provider

  • If you fail to obtain insurance, Elements Massage may obtain it for you and you will be required to reimburse Elements Massage for any premiums and other costs it incurs.

23.  Transfer Fee:  50% of the then-current initial franchise fee

  • Due Date:  Upon signing the consent to transfer.

24.  Transfer Fee Deposit:  $5,000

  • Due Date:  Upon signing the consent to transfer.

25.  Arbitration and Proceeding Costs:  Elements Massage’s arbitration or other proceeding fees and costs, plus attorneys’ fees and costs if Elements Massage prevails in the arbitration or proceeding

  • Due Date:  Upon conclusion of arbitration or proceeding.

26.  Renewal Fee:  $10,000

  • Due Date:  Upon renewal.

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