FDD Talk 2017: What You Need to Know About the Elements Massage Franchise Opportunity (Financial Performance Analysis, Costs and Fees)

In this FDD Talk 2017 post, you’ll learn the following:

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

• Section II – Estimated initial investment for an Elements Massage franchise, based on Item 7 of the company’s 2017 FDD

• Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for an Elements Massage franchise, based on Items 5 and 6 of the company’s 2017 FDD

• Section IV – Presentation and analysis of Elements Massage’s financial performance representations, based on Item 19 of the company’s 2017 FDD, including information on the:

• 2016 average, median, highest, and lowest annual revenue; average gross profit percentage; average number of gift cards sold; average percent with a hired manager; and average number of massage rooms for Elements Massage studios in the system open as of December 31, 2016 and open for at least 12 months as of January 1, 2016

• 2016 average new client trials per month and average membership conversion rate for the 47 Elements Massage studios that were opened between January 1, 2015 and December 31, 2016, were open as of December 31, 2016, and had operated for 1 month or longer

Section I – Background Information

10 Things You Need to Know About the Elements Massage Franchise

Continued Growth Through Offering Personalized Massages

1.  At the beginning of March, Elements Massage reported that the company had another year of double-digit growth with revenues up 21 percent in 2016. In 2016, the franchise system added 21 new studios and Elements is projecting an additional 30 studio openings in 2017.

2.  According to a press release, the driving force behind Elements’ growth is its commitment to providing the most personalized and customized therapeutic massage in the industry, which also serves as the cornerstone of the brand’s 2017 marketing efforts.

3.  The Elements brand is being revitalized with a new look and theme called “Welcome to Youtopia.” The new campaign is currently being rolled out in all of Elements’ communications — from radio, cable, and digital advertising to a website refresh, and the “Welcome to Youtopia” branding will be displayed in all of the lobbies across the system.

4.  Cassie Augustine, a partner and chief strategy officer at Denver-based Agency Zero, the firm responsible for creating the new marketing campaign, says, “Youtopia is a place that’s all about you, the consumer…personalized and done just the way you want it” and that the new ads “elevate the consumer’s understanding about the personal touch Elements offers.”

New Chief Executive Officer

5.  In early April, WellBiz Brands, the parent company of Elements Massage, announced the appointment of Jeremy Morgan as Chief Executive Officer of the brand. Morgan previously held senior leadership roles at Smashburger and most recently served as CEO of Tava Kitchen, which was named one of Nation’s Restaurant News’s “Breakout Brands” in 2016. During Morgan’s tenure at Smashburger, he played a vital role in helping the chain achieve unprecedented growth from 35 to 280 restaurants.

6.  As CEO of Elements Massage, Morgan’s immediate focus will be on supporting its franchise community and introducing the brand to more consumers. Morgan says he plans on dedicating much of his time to listening to Elements franchise owners and providing them with the support they need to be successful.

Company History

7.  Elements Massage was founded in 2000 by Michele Merhib in Aurora, Colorado. Merhib started out as a message therapist who rented out space at a local country club, but lost her space at the country club a year later when the club’s new owners did not want to offer massage therapy. After overcoming the initial shock of the loss of the country club space, Merhib managed to secure a retail space to open the first Elements Massage location.

8.  Merhib opened a second location in Centennial, Colorado and in 2006 signed a contract with Fitness Together Holdings Inc. (now WellBiz Brands) to franchise the Elements Massage concept.

9.  Today, there are over 200 Elements Massage studios across the U.S.

Entrepreneur’s Franchise 500

10.  Elements Massage has ranked a few times on Entrepreneur’s annual Franchise 500 list in the past decade. The company’s highest rank was No. 182 in 2016, while its lowest rank was No. 422 in 2011, its first year on the list. Elements Massage also appeared on Entrepreneur’s 2011 Top New Franchises list at No. 45.

Section II – Estimated Costs

• Please click here for detailed estimates of Elements Massage franchise costs, based on Item 7 of the company’s 2017 FDD (updated).

Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees

• Please click here for detailed information on Elements Massage’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2017 FDD.

Section IV – Financial Performance Representations (Item 19, 2017 FDD) and Analysis