In this FDD Talk 2017 post, you’ll learn the following:
- Section I – Background information on the Massage Heights franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a Massage Heights franchise, based on Item 7 of the company’s 2017 FDD
- Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Massage Heights franchise, based on Items 5 and 6 of the company’s 2017 FDD
- Section IV – Presentation and analysis of Massage Heights’ financial performance representations, based on Item 19 of the company’s 2017 FDD, including information on the:
- 2016 average gross revenues, by quartile, for the 74 franchised Massage Heights businesses that were in operation for 24 months or longer at the beginning of January 1, 2016, were operating a Next Generation Retreat, and were operating a Retreat with at least eight treatment rooms (which is the minimum number of rooms for Retreats for new Franchises)
Section I – Background Information
13 Things You Need to Know About the Massage Heights Franchise
New Retreat Design
1. In early November 2016, Massage Heights announced that its new location in Cypress, Texas, launched the rollout of the company’s new retreat design. Earlier in 2016, Massage Heights said that it wanted to refresh the brand as part of its commitment to provide guests with a consistently elevated experience.
2. The new design features contemporary elements with a natural, soft color palate and wood tones to provide guests with a peaceful atmosphere. The new layout will allow massage therapists and Massage Heights team members to interact with customers on a one-on-one basis and make each experience unique to the individual.
3. Massage Heights has been rolling out the new look across its locations since the start of 2017 and plans to complete the transition by the end of the year.
New Retreat Openings
4. In early May, Massage Heights announced its continued franchise expansion across the U.S. with five new locations (one each in Decatur, Georgia; Fort Collins, Colorado; Houston, Texas; Sea Girt, New Jersey; and Morristown, New Jersey). At the time of the announcement, the company also said that it plans to open six additional retreats through July 2017.
5. Tim Hicks, Senior Vice President of Franchise Operations and Development for Massage Heights, says that he is confident the new franchisees “will utilize their previous professional experiences along with the resources that Massage Heights offers to lead successful businesses.”
6. Massage Heights, which aims to have 300 locations open by 2020, is seeking multi-unit franchisees and area developers in states like Florida, Missouri, California, and Virginia and cities like Las Vegas, Nashville, Salt Lake City, and Chicago.
Over $30,000 Raised to Elevate Lives of Employees
7. In late March, Massage Heights announced that it had raised $31,500 for its nonprofit organization, the Massage Heights Family Fund, Inc., during a fundraising event at its annual international franchising conference in February.
8. The Massage Heights Family Fund, which was founded in 2014, helps to provide financial relief and assistance to U.S. Massage Heights employees and their families during times of need, hardship, or crisis.
9. Massage Heights hopes to raise at least $100,000 this year for the Family Fund “in an effort to increase the ability to assist grant applicants in a more impactful way.” Shane Evans, co-founder and President of Massage Heights, says that she is confident that the company will be able to reach its goal with the help of its guests, members, franchisees, and corporate staff.
Valentine’s Day Special
10. To celebrate Valentine’s Day this year, from the beginning of February until February 14, Massage Heights offered two special promotions, a 90-minute massage with three complimentary therapy-enhancing elevations: hot stone therapy, a revitalizing face massage, and reviving foot scrub; as well as a 90-minute facial with three complimentary elevations using Dermalogica skin care products and enriched oxygen.
11. The spa treatment deals started at $99 and was a way for Massage Heights to offer a convenient, affordable, high-end spa experience to its customers.
12. Massage Heights was founded in 2004 by Wayne and Shane Evans in San Antonio, Texas. The Evans wanted to offer membership-based, professional, therapeutic massage services in attractive, convenient neighborhood locations at affordable prices. Within a year, the second Massage Heights location was opened and franchising officially began. Today, there are over 150 Massage Heights retreats in the U.S. and Canada.
Entrepreneur’s Franchise 500
13. Massage Heights has ranked on Entrepreneur’s annual Franchise 500 list a few times since the company began franchising 12 years ago. The company’s highest rank was No. 159 in 2017, while its lowest rank was No. 491 in 2012.
Section II – Estimated Costs
- Please click here for detailed estimates of Massage Heights 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 Massage Heights’ 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
- Massage Heights’ Item 19 presents information about the Gross Revenues realized by certain franchisees during the period from January 1, 2016 until December 31, 2016 (“Reporting Period”).
- The Gross Revenue information was prepared from sales records and reports by the franchisees of Massage Heights Businesses. The numbers have not been audited but Massage Heights has no reason to doubt their accuracy.
- For purposes of this Item 19, the term “Gross Revenues” means the amount of all cash receipts for the sale of any products or services of the Massage Heights Business. The figures presented below do not reflect the operating expenses or other costs or expenses that must be deducted from the Gross Revenues figures to obtain your net income or profit.
- In October of 2007, Massage Heights implemented a new design for the Massage Heights Business which provided an enhanced experience for guests as well as a uniform look that would appeal to the masses, as opposed to the previous build which appealed at a regional level rather than a national level (“Next Generation Retreat”). All current Franchises sold operate under the Next Generation Retreat design.
- As of December 31, 2016, Massage Heights had a total of 133 Massage Heights Businesses that were open for business during the Reporting Period. This includes 131 Massage Heights Businesses owned by franchisees and two Massage Heights Businesses owned by the franchisor’s affiliates.
- Of those 131 Massage Heights Businesses owned by franchisees, 74 (including Massage Heights Businesses owned by area representatives) met the following criteria: (a) were in operation for 24 months or longer at the beginning of January 1, 2016; (b) were operating a Next Generation Retreat; and (c) were operating a Retreat with at least eight treatment rooms (which is the minimum number of rooms for Retreats for new Franchises) (“Reporting Group”).
- The information below is a historical financial performance representation for these 74 franchised Massage Heights Businesses.
- As of the end of the Reporting Period, the Reporting Group was open at least 36 months. A new franchisee’s financial results are likely to differ from the results presented in this statement.