FDD Talk: Woodhouse Day Spa Franchise Review (Financial Performance Analysis, Costs, Fees, and More)

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

• Section I – Background information on the Woodhouse Day Spa franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a Woodhouse Day Spa franchise, based on Item 7 of the company’s 2018 FDD

• Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Woodhouse Day Spa franchise, based on Items 5 and 6 of the company’s 2018 FDD

• Section IV – Number of franchised and company-owned Woodhouse Day Spa outlets at the start of the year and the end of the year for 2015, 2016, and 2017, based on Item 20 of the company’s 2018 FDD

• Section V – Presentation and analysis of Woodhouse Day Spa’s financial performance representations, based on Item 19 of the company’s 2018 FDD, including information on the:

• 2017 average gross sales; cost of goods sold; gross profit; sales, general, and administrative expenses; EBITDA; other expenses; and net income for 2 of the company-owned Woodhouse Day Spas in the San Antonio, Texas market that were open and operating from January 1, 2017 to December 31, 2017

• 2017 average, median, high, and low gross sales for (a) the 9 franchised Woodhouse Day Spas that were in operation for between 12 full calendar months and 23 full calendar months as of December 31, 2017 and (b) the 37 franchised Woodhouse Day Spas that were in operation for at least 24 full calendar months as of December 31, 2017

Section I – Background Information

14 Things You Need to Know About the Woodhouse Day Spa Franchise

New Locations

1.  The Woodhouse Day Spa has been growing steadily across the United States since it first started franchising in 2003. In late 2018, the company opened two new locations, one in Grand Rapids, Michigan and the other in Liberty Township, Ohio. Woodhouse Grand Rapids had its grand opening on October 6, while the Liberty Township Woodhouse Day Spa opened in mid-November.

2.  Woodhouse Grand Rapids is owned and operated by husband-and-wife franchisees David and Michelle Pezzato. This location is the first Woodhouse Day Spa in the West Michigan region. David Pezzato said, “My wife and I are life-long residents of West Michigan, and we saw the need for a place where people can truly unplug. Woodhouse is unique, as guests will be able to experience a full-service, resort-style spa without having to leave Grand Rapids. In today’s hectic world, it is important that people remember to take time for themselves.”

3.  The Woodhouse Day Spa in Liberty Township is the third for the Southwest Ohio region and is owned by Chris Mann. Mann also owns Woodhouse Day Spa locations in the Hamilton County suburb of Montgomery and The Greene Towne Center in Beavercreek, and is also the regional developer for Ohio, Kentucky, Pennsylvania, and North Carolina locations.

4.  The Liberty Township Woodhouse Day Spa is the company’s first standalone location. According to Mann, the location he chose for the spa is perfect because it is directly between the spa’s Cincinnati and Dayton area locations. The Liberty Township location is almost double the size of each of those locations. Mann added, “The idea is to have a larger, standalone location that we can use for some of our larger groups and parties that we just can’t accommodate at our smaller lifestyle center locations.”

5.  In the same press release, Mann said he considers Woodhouse to be distinctive because of its luxury, unmatched customer service and because it is “a resort-destination spa, but in your own backyard.” He added, “We look at ourselves as slotting between a massage clinic that you might find in a strip mall and a Ritz Carlton. We’re much nicer than a clinic and as nice as a Ritz Carlton but without the pools and the Jacuzzi and all that stuff.”

6.  Mann also stated that Woodhouse Day Spas try to be involved with their local communities as much as possible. According to Mann, Woodhouse Day Spa already works with non-profit organizations like Susan G. Komen, the Make-A-Wish Foundation, and the Dragonfly Foundation. It is looking into partnering with the Wounded Warrior Project.

7.  Mann said, “When we opened our business, it wasn’t about making money, it was about providing people an escape and who needs an escape more than people that are going through tough times. We love to provide opportunities to those folks as much as possible and that’s always been one of our core values.”

Rewards Program

8.  The Woodhouse Day Spa offers all of its customers the opportunity to join its rewards program. There are several ways for rewards members to earn points, which can be used to purchase services, retail items, or gift cards. One reward dollar is equal to one real dollar. Members can also receive bonus reward dollars for special events.

9.  Other ways to earn points include:

• 10 reward dollars for referring a new customer once they purchase a service;
• 10 bonus reward dollars for a service purchase over $150;
• 5 reward dollars for pre-booking and receiving that service;
• 5 reward dollars for booking a service online.

Company History

10.  The Woodhouse Day Spa was founded in 2001 by Jeni Garrett in Victoria, Texas. Garrett was only 21 when she started Woodhouse Day Spa, but she has always had a knack for business. As a teenager, she bought and sold cattle for her family’s ranch.

11.  When Garrett was in college, she learned the intricacies of duplicating processes within a service-based business while also maintaining consistencies within each center. Garrett loved spas and felt that she could use what she learned to build a successful business model in what she felt was a disorganized and fragmented spa industry.

12.  Garrett and her husband ended up buying a 1906 landmark home in Victoria, Texas, built by a railroad conductor whose last name was Woodhouse. They turned the house into the first Woodhouse Day Spa and named it after the home’s original builder/owner.

13.  In 2003, Garrett started franchising the Woodhouse Day Spa concept. The company continues to seek new franchisees across the United States.

Entrepreneur’s Franchise 500

14.  The Woodhouse Day Spa did not rank on Entrepreneur’s 2019 Franchise 500 list.

Section II – Estimated Costs

• Please click here for detailed estimates of Woodhouse Day Spa franchise costs, based on Item 7 of the company’s 2018 FDD.

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

• Please click here for detailed information on Woodhouse Day Spa’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2018 FDD.

Section IV – Number of Franchised and Company-Owned Outlets

Franchised

2015

• Outlets at the Start of the Year:  37
• Outlets at the End of the Year:  43
• Net Change:  +6

2016

• Outlets at the Start of the Year:  43
• Outlets at the End of the Year:  48
• Net Change:  +5

2017

• Outlets at the Start of the Year:  48
• Outlets at the End of the Year:  51
• Net Change:  +3

Company-Owned

2015

• Outlets at the Start of the Year:  2
• Outlets at the End of the Year:  2
• Net Change:  0

2016

• Outlets at the Start of the Year:  2
• Outlets at the End of the Year:  4
• Net Change:  +2

2017

• Outlets at the Start of the Year:  4
• Outlets at the End of the Year:  4
• Net Change:  0

Section V – Financial Performance Representations (Item 19, 2018 FDD) and Analysis

Part 1 – Analysis of Average Sales and Certain Average Costs and Expenses for Company-Owned Woodhouse Day Spas

• Part 1 of this Financial Performance Representation analyzes average sales and certain average costs and expenses for company-owned Woodhouse Day Spas.

• The analysis was based on the operating results of 2 of the Company-Owned Woodhouse Day Spas in the San Antonio, Texas market that were open and operating from January 1, 2017 to December 31, 2017 (“Reporting Company-Owned Spas”).

• There are 2 Company-Owned Woodhouse Day Spas located within hotels in the San Antonio, Texas market that are not included in this analysis since they are not traditional Spa locations and are targeted toward guests of the hotels in which they are located as opposed to the general public.

• The Reporting Company-Owned Spas offer substantially the same products and services that your Spa will offer. Each of the Reporting Company-Owned Spas used a uniform accounting system, and the data was prepared on a basis consistent with generally accepted accounting principles during the applicable period. The Reporting Company-Owned Spas averaged 10 years in operation. The information has not been audited.

Average Sales, Costs, and Expenses for the Reporting Company-Owned Spas for the Period from January 1, 2017 through December 31, 2017 (unaudited)