In this FDD Talk 2017 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 2017 FDD
- Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a MassageLuXe franchise, based on Items 5 and 6 of the company’s 2017 FDD
- Section IV – Presentation and analysis of MassageLuXe’s financial performance representations, based on Item 19 of the company’s 2017 FDD, including information on the:
- 2016 average annual revenue for the 34 franchisee-owned MassageLuXe Spas that were open during the entire 2016 calendar year
- 2016 adjusted average operating results (i.e. revenue, operating expenses, net income) for the 5 affiliate-owned MassageLuXe Spas that were operated by the franchisor’s affiliates for the entire 12 months during this period
Section I – Background Information
11 Things You Need to Know About the MassageLuXe Franchise
Company Under New Leadership as Founder and CEO Faces Legal Troubles
1. In early December, Todd Beckman, founder of MassageLuXe and CEO and President of its parent company BAM Brands, appeared in court for the first time along with three other suspects to face charges of kidnapping and assault. Authorities claim that Beckman helped orchestrate an attack on a young man sparked by a drug debt. According to police, Beckman collected a $27,000 ransom from the victim’s family.
2. BAM Brands released a statement at the time stating that MassageLuXe and other BAM Brands are individually owned and operated by franchisees and that the franchises will continue to operate in the ordinary course of business, regardless of Beckman’s personal legal issues.
3. The press release also stated that Beckman had turned over operational, day-to-day control of the entire BAM Brands family to Mark Otter, who previously served as the Division President of the Steak ‘n Shake brand, back in early April 2016. At that time, Otter was appointed Chief Operating Officer of BAM Brands.
4. MassageLuXe currently has several special offers on massages, facials, and waxes. There are three deals for first time clients: a one hour standard massage for $48 (regular price: $74); a one and a half hour standard massage for $68 (regular price: $111); and a one hour LuXe facial for $48 (regular price: $74).
5. MassageLuXe also has two free offers: a free HydroLuXe dry water massage and a free eyebrow or lip wax for women or a free eyebrow, ear, or nose wax for men.
Offering More Than a Standard Massage
6. MassageLuXe stands out from the competition by offering a wide variety of massages. The standard massage is a Swedish massage, which is the most common type of massage therapy in the U.S. Deep tissue massages and prenatal massages for expectant mothers also count toward members’ standard massage option. MassageLuXe’s specialty offerings include hot stone, aromatherapy, reflexology, sports massage, and Trigger Point Therapy.
7. MassageLuXe was founded in 2008 by Todd Beckman in Fenton, Missouri; franchising began that same year. The company specializes in delivering high quality massage, facial, and waxing services in a luxurious and relaxing environment.
8. MassageLuXe offers three different membership tiers for its services: LuXe, which includes a one hour standard massage session or a LuXe facial session each month; Elite, which includes a one and a half hour standard massage session or one hour specialty massage session each month; and Epic, which includes a two hour standard massage session, a one and a half hour specialty massage session, or a FaceLuXe VIP Facial/Microdermabrasion session each month.
9. All memberships can be used at any MassageLuXe location and include a 15% discount on products and waxing services, and unlimited daily HydroLuXe sessions. MassageLuXe offers certain services such as facials from its sister concept FaceLuXe.
10. There are currently over 40 MassageLuXe locations in the U.S.
Entrepreneur’s Franchise 500
11. MassageLuXe has ranked on Entrepreneur’s annual Franchise 500 list every year since making its debut in 2013 at No. 355. The company’s highest rank was No. 208 in 2017, while its lowest rank was No. 387 in 2016.
Section II – Estimated Costs
- Please click here for detailed estimates of MassageLuXe 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 MassageLuXe’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
- This financial performance representation contains (1) the actual 2016 average annual revenue of all franchised Spas in operation during the entire 2016 calendar year (Part 1, below); and (2) the adjusted average 2016 operating results of certain affiliate-owned Spas (Part 2, below).
Part 1 – Actual 2016 Average Annual Revenue of Franchised MassageLuXe Spas
- The financial performance representation in this Part 1 contains the actual 2016 average annual revenue of 34 franchisee-owned Spas that were open during the entire 2016 calendar year.
- These 34 Spas represent approximately 87% of the total 39 franchisee-owned Spas open for business as of December 31, 2016. Spas that were not in operation for all of 2016 have been excluded from the financial performance representation as their partial year performance is not indicative of the performance MassageLuXe would reasonably expect to see over an entire calendar year.
- The Spas used to compile the information below have been in operation between 1 and 6 years.
- These results are based on the sales data MassageLuXe collects from the computer system software used by its franchisee-owned Spas. MassageLuXe has not independently audited this information.
- The actual average annual revenue numbers do not reflect the costs of sales, operating expenses, or other costs or expenses that must be deducted from revenue to obtain net income or profit.
13 to 24 Months in Operation