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Earnings Claims of Top Franchises Revealed

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Considering a Massage Heights Franchise? Don’t Overlook These 37 Important Franchise Fees

by Franchise Chatter on July 10, 2017

in Franchise Fees, Massage Franchise



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

If you are considering a Massage Heights franchise, don’t get blindsided by these 37 important franchise fees (from the initial franchise fee, to the royalty fee, to 35 other fees found in Items 5 and 6 of Massage Heights’ 2017 FDD).

1.  Initial Franchise Fee:  $32,000 to $42,000

  • You must pay Massage Heights an initial franchise fee (“Initial Franchise Fee”) of $42,000 for the first Massage Heights Franchise.
  • If you purchase additional Massage Heights Franchises at the same time as your first Massage Heights Franchise, the franchisor will discount your Initial Franchise Fee to $32,000 for each additional Massage Heights Franchise, payable when you execute your Franchise Agreement or the Area Development Agreement, if applicable.
  • Massage Heights participates in the VetFran program. Under this program, active duty military and honorably discharged veterans of the United States armed forces receive a 10% discount on Massage Heights’ Initial Franchise Fee.
  • During Massage Heights’ last fiscal year, which ended December 31, 2016, Massage Heights collected Initial Franchise Fees ranging from $0 to $42,000.

2.  Start-Up Advertising Expense:  minimum of $14,000

  • You are required to spend a minimum of $14,000 (“Start-Up Advertising Expense”) for the opening of your Massage Heights Business.
  • Massage Heights reserves the right to conduct your initial advertising program on your behalf. If Massage Heights exercises this right, the Start-Up Advertising Expense amount will be payable to it, plus a 10% administrative fee, if it chooses to conduct the grand opening campaign. If payable to Massage Heights, this expense will be due prior to the opening of the Retreat and is not refundable.

3.  Retreat Development Package:  $115,000 to $136,000



  • Massage Heights requires franchisees to purchase a “Retreat Development Package” of startup items from Summit. This payment is due upon the approval and signing of the lease for your Retreat.
  • The Retreat Development Package will be delivered to your Retreat at a designated time in the build out process prior to the opening of your Retreat.
  • The installation of the millwork and delivery are included in this cost and will be arranged by Summit.
  • Massage Heights estimates the cost of the Retreat Development Package to range from $115,000 to $136,000, depending on the size of your particular Retreat. You may also be required to pay sales or use tax for the Retreat Development Package.
  • The Retreat Development Package payments are not refundable under any circumstances.

4.  Software:  $2,000

  • You are also required to purchase your operations software from Massage Heights. You must pay Massage Heights a fee of $2,000 for the software which includes installation and three months of maintenance fees, payable upon the signing of the Franchise Agreement.
  • You will be assessed a monthly, on-going maintenance fee of $500 per month after the initial three months.

5.  Site Evaluation Assistance:  $0 to $5,000

  • If you request that Massage Heights send a representative into your city to assist you in the site selection process for your Retreat, and if it elects to assist you, it reserves the right to charge a site evaluation assistance fee ranging from $0 to $5,000 (“Site Evaluation Assistance Fee”) in accordance with the fee schedule set forth in the confidential Brand Standards Manual.
  • Alternatively, Massage Heights may require you to use its approved supplier for site selection assistance. If Massage Heights required this, you would pay the supplier directly for this service.
  • The Site Evaluation Assistance Fee is deemed fully earned by Massage Heights once paid and is non-refundable.

6.  Demographic /Psychographic Analysis:  $1,000

  • You are required to pay Massage Heights a $1,000 site analysis fee to analyze the sites that you submit for your Retreat.
  • The analysis provides information helpful to not only select a site that matches up with Massage Heights Franchise core customers but with relevant information you can use to market to the customer segments in your area as part of your local store marketing plan.
  • This fee is due when you submit Retreat sites for approval and is non-refundable.

7.  Fixed Royalty Fee:  $250 per week until the Retreat is open

  • If you fail to open the Massage Heights Business within 270 days from the effective date of your Franchise Agreement, you will pay a fixed royalty fee (“Fixed Royalty Fee”) in the amount of $250 per week until the Retreat is open.
  • This fee is non-refundable.

8.  Development Fee:  $42,000 plus $32,000 for each additional Franchise you open under the Area Development Agreement



  • Area Developers must pay a development fee (“Development Fee”) which is equal to the Initial Franchise Fee for each Massage Heights Business you intend to develop under the Area Development Agreement.
  • The Development Fee is equal to $42,000 plus $32,000 for each additional Franchise you open under the Area Development Agreement.
  • Area Developers must open a minimum of two Massage Heights Businesses.
  • The Development Fee must be paid when you sign the Area Development Agreement and is not refundable under any circumstances, even if you fail to meet your Development Schedule.
  • You will be required to sign Massage Heights’ then-current Franchise Agreement for the initial Massage Heights Business at the same time you sign the Area Development Agreement. You will sign Massage Heights’ then-current Franchise Agreement for each additional Massage Heights Business according to your Development Schedule.
  • You will not be required to pay an Initial Franchise Fee under these Franchise Agreements because you will have already paid the Initial Franchise Fee by paying the Development Fee.
  • All other fees will apply for each additional Massage Heights Business.

9.  Royalty:  6% of Gross Revenues or $250 Fixed Royalty Fee

  • Due Date:  Due bi-weekly on Wednesdays.
  • Once the Retreat is open, the royalty fee is based on Gross Revenues during the previous two weeks.
  • If the Retreat does not open within 270 days after you sign the Franchise Agreement, you will pay the Fixed Royalty Fee in the amount of $250 per week until the Retreat is opened or the Franchise Agreement is terminated according to Massage Heights’ rights set forth in the Franchise Agreement.

10.  Brand Fund Contribution:  currently 1.5% to 3% of Gross Revenues

  • Due Date:  Same as royalty.
  • You will be required to contribute 1.5% of your Gross Revenues during the first 12 months of operation of your Massage Heights Business (this only applies to new Massage Heights Businesses, and not the assignments, assumptions, or transfers of existing Massage Heights Businesses).
  • This will increase to 3% beginning with your 13th month.
  • This contribution will be used for a system-wide “Brand Fund” for Massage Heights’ use in promoting and building the Massage Heights brand.
  • Massage Heights reserves the right to increase this contribution up to 5% upon 30 days’ written notice.

11.  Local Advertisement Payment:  the difference between the amount you spent on local advertising each month and your required local advertising expenditure

  • Due Date:  As incurred.
  • If you fail to meet your minimum local advertising requirements on local advertising, you must pay Massage Heights the difference between the amount you spent and the required advertising expenditure, which will be contributed to the Brand Fund.

12.  Local and Regional Advertising Cooperatives:  established by cooperative members

  • Due Date:  Established by cooperative members.
  • The cooperative will establish rules approved by Massage Heights. Each Massage Heights Business gets one vote.

13.  Software Fee:  currently, $500 setup fee and a monthly maintenance fee

  • Due Date:  Same as royalty.
  • Payable after initial 3 months of operation.
  • Massage Heights may change or update software and you will be required to pay for updates or new software.
  • This monthly fee may increase each year on the anniversary of the execution of the Franchise Agreement.

14.  Additional Persons Fee for Initial Program:  $500 per person per day

  • Due Date:  As incurred.
  • An initial Training Program is provided at no charge for up to 3 people, 1 of whom must be a managing owner.

15.  Additional Training and Assistance Fees:  $500 per day plus expenses, including travel, lodging, and meals

  • Due Date:  On demand.
  • If Massage Heights determines the need of, or if Franchisee desires, additional training or assistance, Massage Heights may require this fee plus all travel, lodging, and meal expenses incurred by its staff.

16.  Relocation Fee:  Massage Heights’ costs up to $5,000

  • Due Date:  Upon relocation.
  • You must reimburse Massage Heights for its reasonable expenses if it permits you to relocate the Massage Heights Business.
  • Massage Heights will provide you with copies of its invoices for its expenses from any third party providers upon request.

17.  Transfer Fee:  25% of the then-current Initial Franchise Fee

  • Due Date:  $1,000 non-refundable deposit at time of transfer application submittal and the remaining balance of fee at time of approved transfer.
  • Payable only in connection with the transfer of your Massage Heights Business, a transfer of ownership of your legal entity or the Franchise Agreement.

18.  Successor Franchise Fee:  25% of the then-current Initial Franchise Fee

  • Due Date:  Before execution of successor Franchise Agreement.
  • This fee is payable if you qualify for a successor Franchise and choose to enter into a successor Franchise Agreement. This is commonly referred to as a “renewal fee.”

19.  Audit Expenses:  cost of audit and inspection, any understated amounts, and any related accounting and legal expenses

  • Due Date:  On demand.
  • You will be required to pay this if an audit reveals that you understated weekly Gross Revenues by more than 2% for the audited period or if you do not submit the required reports.

20.  Insurance Placement:  you must reimburse Massage Heights’ costs plus a 20% administrative fee

  • Due Date:  On demand.
  • If you fail to obtain insurance, Massage Heights may obtain insurance for you and you must reimburse it for the cost of insurance obtained plus 20% of the premium for an administrative cost of obtaining the insurance.

21.  Indemnification:  will vary under circumstances

  • Due Date:  As incurred.
  • You must indemnify and reimburse Massage Heights for any expenses or losses that it or its representatives incur related in any way to your Massage Heights Business.

22.  Legal Costs, Accounting Fees, and Other Professional Fees:  will vary under circumstances

  • Due Date:  As incurred.
  • You will be required to reimburse Massage Heights for any legal, accounting, or other professional fees that it incurs as a result of any breach or termination of your Franchise Agreement.
  • You must reimburse Massage Heights if it is required to incur any expenses in enforcing its rights against you under the Franchise Agreement.

23.  Late Payment Fee:  $100 per occurrence

  • Due Date:  As incurred.
  • Payable if any payment due to Massage Heights or its affiliates is not made by the due date.

24.  Interest:  lesser of 18% per annum or highest commercial contract interest rate allowed by law

  • Due Date:  As incurred.
  • This fee is charged on any late payments to Massage Heights or its affiliate, including royalty fees, advertising contributions, and product purchases.

25.  Late Reporting Fee:  $100 per week

  • Due Date:  As incurred.
  • You will continue to incur this fee until you submit the required report.

26.  Insufficient Funds Fee:  $100 per incident

  • Due Date:  As incurred.
  • Payable if any check or electronic funds transfer (“EFT”) is not successful due to insufficient funds, stop payment, or any similar event.

27.  Payment Service Fees:  up to 4% of total charge

  • Due Date:  As incurred.
  • If payment is made to Massage Heights by credit card for any fee required, Massage Heights may charge a service charge of up to 4% of the total charge.

28.  Supplier and Product Evaluation Fee:  cost of inspection and test of sample (approximately $100 to $500 per test)

  • Due Date:  As incurred.
  • Payable if Massage Heights inspects a new product or service or a proposed supplier nominated by you.

29.  De-Identification:  will vary under circumstances

  • Due Date:  As incurred.
  • Payable if Massage Heights de-identifies the Franchise upon its termination, relocation, or expiration.

30.  Management Fee:  $200 per day plus expenses, including travel, lodging, and meals

  • Due Date:  As incurred.
  • If you default under the Franchise Agreement or the designated retreat director dies or becomes disabled, Massage Heights can designate a temporary manager to manage your Retreat until you cure the default or find a replacement designated retreat director, which may be you or one of your owners, as applicable.

31.  Promotional Package Fee:  varies depending on merchandise

  • Due Date:  As incurred.
  • Massage Heights may put together promotional packages that will include specific holiday promotional materials. Massage Heights estimates each package to cost less than $200 but the actual cost will depend on the size of your Retreat and the materials included.

32.  National Franchise Convention Fee:  varies each year (currently between $179 to $299 per person)

  • Due Date:  Annually.
  • Payable to Massage Heights to help defray the cost of your attendance at the annual convention.
  • This fee is non-refundable and is due even if you do not attend the convention.

33.  Initial Training Extension Fee:  $500

  • Due Date:  On demand.
  • This fee is due if Massage Heights is unable to complete initial training in the specified time frame due to your lack of knowledge, failure to attend, or other factors in your control.

34.  Customer Issue Resolution:  reasonable costs Massage Heights incurs for responding to a customer complaint, which varies

  • Due Date:  On invoice.
  • Payable if a customer of a Massage Heights Business you operate contacts Massage Heights with a complaint and Massage Heights provides a gift card, refund, or other value to the customer as part of its addressing the issue.

35.  Default Fee:  $500 per incident

  • Due Date:  On demand.
  • Payable if you are in default of your Franchise Agreement (this fee does not apply to failure to meet opening deadline) and do not cure the default within the required period.
  • This fee is deposited into the Brand Fund contribution for the benefit of all Franchisees and is not collected for Massage Heights’ profit.

36.  Liquidated Damages:  50% of the then-current Initial Franchise Fee

  • Due Date:  Within five days after termination of the Franchise Agreement.
  • Due if Massage Heights terminates the Franchise Agreement before the end of the term because of your material breach, or you terminate the Franchise Agreement without legal cause.

37.  Broker Fees:  the actual cost of the brokerage commissions, finder’s fees, or similar charges

  • Due Date:  As incurred.
  • Payable only in connection with the transfer to a purchaser that was referred to you through a broker that is not an affiliate of Massage Heights.

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