FDD Talk: Spavia 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 Spavia Day Spa franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a Spavia Day Spa franchise, based on Item 7 of the company’s 2019 FDD

• Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Spavia Day Spa franchise, based on Items 5 and 6 of the company’s 2019 FDD

• Section IV – Number of franchised and company-owned Spavia Day Spa outlets at the start of the year and the end of the year for 2016, 2017, and 2018, based on Item 20 of the company’s 2019 FDD

• Section V – Presentation and analysis of Spavia Day Spa’s financial performance representations, based on Item 19 of the company’s 2019 FDD, including information on the:

• 2018 average, median, high, and low monthly gross sales for (i) the 8 Spavia Day Spas that were open and operating for more than 36 months as of December 31, 2018 (each, a “Mature Location”); and (ii) the 15 franchised Spavia Day Spas that were open between 13 and 36 months as of December 31, 2018

• 2018 actual and average total revenue and membership revenue for (i) the 8 Mature Locations; and (ii) the 15 franchised Spavia Day Spas that were open between 13 and 36 months as of December 31, 2018

• 2018 average gross sales, cost of good sold, gross profit, occupancy costs, other reported operating expenses, royalty, and operating income for the 10 Spavia Day Spas that were open for at least 2 years as of December 31, 2018, and provided the appropriate or necessary information

Section I – Background Information

10 Things You Need to Know About the Spavia Day Spa Franchise

Newest Location

1.  Spavia continues to grow around the United States and one of its newest locations celebrated its grand opening in Thornwood, New York in early September 2019. Spavia Thornwood, which is owned and operated by Ben Rossman, held a Grand Opening Ribbon Cutting Celebration on September 6.

2.  At the Grand Opening, guests were able to enjoy complimentary refreshments, demonstrations, tours, special offers, and giveaways. Over the opening weekend, guests could enter a free raffle for a chance to win a rejuvenate package ($389 value). Before officially opening in September, Spavia Thornwood held a well-received Sip and See Pre-Opening event in July followed by their soft opening on July 21.

3.  According to Rossman, “The community is extremely supportive of our new business including members of the Mt. Pleasant Chamber of Commerce and Master Networks Mount Pleasant Chapter. I look forward to meeting more neighbors and business owners at our opening weekend celebration.”

4.  In addition to running Spavia Thornwood, Rossman has engaged in several community and charity events including sponsoring the Make-A-Wish Foundation. Rossman looks forward to participating as a Wish Hero sponsor for the 2019 Walk for Wishes. Members of the Make-A-Wish Foundation were in attendance at the Grand Opening for those interested in finding out more about supporting the organization. A portion of all proceeds for the month of September at Spavia Thornwood was donated to the Make-A-Wish Foundation.

Brings Back Pumpkin Peptide Facial for Fall Season

5.  To kick off the fall season in 2019, Spavia brought back its popular Pumpkin Peptide Facial. According to Spavia, the seasonal facial includes vitamin-rich antioxidants to hydrate skin, improve elasticity, and leave skin visibly firmer. It also contains organic pumpkin enzymes that stimulate collagen production and reveal radiant skin.

6.  The Pumpkin Peptide is the entire package. From Spavia’s hydrating milk and honey cleanser to exfoliation with pumpkin enzymes, customers are able to experience the height of luxury with all the benefits of natural ingredients. The treatment also includes a revitalizing anti-aging mask, peptide serum, and eye cream that help improve elasticity, relax fine lines and wrinkles, and inhibit the signs of aging for a radiant, youthful glow. Spavia finishes the treatment with a pressed mineral powder from Jane Iredale that includes SPF 20 with broad spectrum sun protection recommended by the skin cancer foundation.

7.  The Pumpkin Peptide Facial contains the following ingredients and offers the following benefits:

• Hyaluronic Acid for Hydration – Hyaluronic acid is a powerful ingredient to hydrate the skin and prevent moisture loss. According to Spavia, this is especially important when the temperatures drop. Hyaluronic acid has water-binding properties that plump the skin, which in turn, melts away fine lines and wrinkles. It’s the ultimate anti-aging supplement to help boost any skincare regimen.

• Milk Proteins to Brighten – Milk proteins are a natural source of amino acids and enzymes. They are safe for all skin types and counteract any irritation caused by environmental factors. Milk proteins also lock in moisture for visible benefits that customers can enjoy long-term.

• Raw Honey for Nourishment – Honey is a natural source of phytonutrient antioxidants, B vitamins, and skin-friendly minerals. In short: it helps skin heal and regenerate, while preventing bacterial damage. This keeps skin healthy and nourished without any harsh side effects.

• Lactic Acid to Boost Collagen Production – Lactic acid is traditionally used to treat hyperpigmentation, age spots, and uneven complexions. It’s a super powerful ingredient that also stimulates collagen production at the deepest levels of skin. This reduces fine lines and wrinkles.

Company History

8.  Spavia was founded in 2005 by Allison Langenderfer and her husband Marty in Ann Arbor, Michigan. The Langenderfers wanted to provide a luxury spa experience at an affordable price. According to Spavia, the Langenderfers chose the company’s name because “via” means pathway or route in many languages and the Langenderfers wanted Spavia to be the first step in people’s journeys to wellness.

9.  Two years after opening the first Spavia, the Langenderfers started franchising the concept. The company has grown slowly but steadily over the past decade and there are now locations across the United States. The Langenderfers currently still own and operate Spavia, with Allsion Langenderfer serving as president and Marty Langenderfer holding the role of CEO.

Entrepreneur’s Franchise 500

10.  Spavia ranked No. 258 on Entrepreneur’s 2020 Franchise 500 list.

Section II – Estimated Costs

• Please click here for detailed estimates of Spavia Day Spa franchise costs, based on Item 7 of the company’s 2019 FDD.

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

• Please click here for detailed information on Spavia Day Spa’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2019 FDD.

Section IV – Number of Franchised and Company-Owned Outlets

Franchised

2016

• Outlets at the Start of the Year:  7
• Outlets at the End of the Year:  18
• Net Change:  +11

2017

• Outlets at the Start of the Year:  18
• Outlets at the End of the Year:  24
• Net Change:  +6

2018

• Outlets at the Start of the Year:  24
• Outlets at the End of the Year:  35
• Net Change:  +11

Company-Owned

2016

• Outlets at the Start of the Year:  1
• Outlets at the End of the Year:  1
• Net Change:  0

2017

• Outlets at the Start of the Year:  1
• Outlets at the End of the Year:  1
• Net Change:  0

2018

• Outlets at the Start of the Year:  1
• Outlets at the End of the Year:  1
• Net Change:  0

Section V – Financial Performance Representations (Item 19, 2019 FDD) and Analysis

• Part 1 of this Item 19 discloses the average monthly revenue generated by the following subsets of Day Spas that are operated in a substantially similar manner to the Franchised Business being offered in the Disclosure Document: (i) the eight Day Spas that were open and operating for more than 36 months as of December 31, 2018 (each, a “Mature Location”); and (ii) the 15 franchised Day Spas that were open between 13 and 36 months as of December 31, 2018 (collectively, the “Disclosed Day Spas”).

• For each of the 2 groups of Day Spas described above, Spavia will provide the average and median monthly Gross Sales generated by the Day Spas in that group over the 2018 calendar year (the “Measurement Period”), as well as the high and low Gross Sales reported in each group over the Measurement Period.

• In Part 1, be advised that the average monthly Gross Sales for each individual Day Spa was calculated by taking the total Gross Sales of that Day Spa over the Measurement Period and dividing that figure by the total number of calendar months that Day Spa was open and operating during the Measurement Period.

• Part 2 of this Item 19 discloses the annual revenue generated as of December 31, 2018 for Day Spas falling within the same subsets as those listed in Part 1 above.

• Part 3 of this Item provides further insight into the operating costs and expenses incurred by locations operating for over two years as of December 31, 2018, over the Measurement Period.

Part 1 – Average Monthly Gross Sales Generated Amongst Two Groups of Disclosed Day Spas (Grouped Based on Number of Months Open as of December 31, 2018)

Number of Months in Operation as of December 31, 2018:  Over 36 Months