FDD Talk 2020: Elements Massage 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 Elements Massage franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for an Elements Massage franchise, based on Item 7 of the company’s 2020 FDD

• Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for an Elements Massage franchise, based on Items 5 and 6 of the company’s 2020 FDD

• Section IV – Number of franchised and company-owned Elements Massage outlets at the start of the year and the end of the year for 2017, 2018, and 2019, based on Item 20 of the company’s 2020 FDD

• Section V – Presentation and analysis of Elements Massage’s financial performance representations, based on Item 19 of the company’s 2020 FDD, including information on the:

• 2019 average, median, highest, and lowest revenue; average gross profit percentage; average number of rooms; average new client trials; average conversion percentage; and average number of members as of December 31, 2019 for the top 10, top third, bottom third, bottom 10, and all  franchised studios that were open as of January 1, 2019, and operated throughout 2019; all franchised studios that were open for at least one year as of January 1, 2019, and operated throughout 2019; and all franchised studios that were open for at least five years as of January 1, 2019, and operated throughout 2019

• 2019 average and median new client trials per month for the top third, bottom third, and all franchised studios that were open as of December 31, 2018, and had operated for at least one month or longer

• 2019 average and median conversion percentage for the top third, bottom third, and all franchised studios that were open as of December 31, 2018, and had operated for at least one month or longer

Section I – Background Information

16 Things You Need to Know About the Elements Massage Franchise

Celebrates Milestone of 250 Studio Locations

1.  In mid-July 2019, Elements Massage announced the grand opening of the brand’s 250th studio location in Denver, Colorado. Susan Lintonsmith, CEO of Elements Massage, said, “Over a decade ago, Elements Massage was started by a Massage Therapist with the goal of providing the therapeutic and healing benefits of massage therapy to every client. Today, the brand remains exclusively focused on massage and delivering on our mission of providing a personalized experience to meet each client’s need on every visit. Opening the 250th studio is a tremendous milestone for the brand. Thank you to all our franchisees and their studio employees and most importantly, our clients.”

2.  Lintonsmith added, “We’re thrilled to be launching our new design at the studio in Cherry Creek. This new design has a contemporary design palette that calms the senses while allowing each client to customize the color and intensity of their specific treatment room lighting. We also increased the investment in the breakroom, with the goal of creating a better work environment for massage therapists so they can be at their best for each client.”

3.  Around the time of the announcement, Elements Massage was recognized as number one in the Spa, Wellness, and Beauty category of Newsweek’s inaugural 2019 list of America’s Best Companies for Customer Service. The company also launched Herbal Ritual, the first hemp-infused therapeutic massage service offered by a national franchise brand, and in 2018 introduced AromaRitual, the brand’s line of exclusive aromatherapy treatments.

Introduces Sweet Orange AromaRitual

4.  In October 2019, Elements Massage announced the newest addition to the brand’s exclusive line of aromatherapy treatments, Sweet Orange AromaRitual. This signature offering was available for a limited time nationwide beginning October 1.

5.  For any client who added a Sweet Orange AromaRitual upgrade to their massage between October 1 and October 31, Elements Massage sweetened the deal and automatically entered them to win a year of free massage sessions (12-month, 1-hour Elements Wellness Program membership) for each massage with the upgrade received during the month. There was one winner nationwide and the contest was open to both member and non-members. There was no limit on entries during the promotional period.

6.  Available while supplies lasted, Sweet Orange AromaRitual infused the uplifting aroma of orange and was the perfect way to help recharge and restore your health in the fall. Comprised of lime, lemon, orange, and ylang ylang, this combination of ingredients provides a variety of health benefits.

7.  Eric Stephenson, chief wellness officer of Elements Therapeutic Massage, LLC, said, “Our new Sweet Orange scent was formulated to not only leave you feeling relaxed and rejuvenated, but also provide health benefits that may decrease symptoms caused by stress and anxiety and help to increase your overall energy.”

8.  With AromaRitual, Elements Massage clients experience a personalized, immersive aromatic treatment. In addition to this new service offering, Elements Massage studios also offer three additional AromaRitual essences – Energize, Refresh, and Calm. AromaRitual is available at all Elements Massage locations nationwide and can be added as an upgrade to any massage session for clients seeking additional benefits from their massage session.

9.  Susan Lintonsmith, CEO of Elements Therapeutic Massage, added, “The Elements Massage brand is committed to helping people improve their health and wellness, so they can enjoy a more productive life. The introduction of our limited-time Sweet Orange AromaRitual service builds on the brand’s mission of providing innovative, personalized massage services that address clients’ needs and contribute to their overall wellness.”

Ranked on Newsweek’s 2020 America’s Best Customer Service List

10.  In mid-December 2019, Elements Massage was recognized by Newsweek on its 2020 America’s Best Customer Service list in the Spa, Wellness, and Beauty category, for the second year in a row. Elements Massage, one of the nation’s fastest-growing therapeutic massage franchise brands with approximately 250 locations across the United States and Canada, had a notable past year.

11.  Achievements included becoming the nation’s first massage franchise brand to offer hemp-infused Herbal Ritual Therapeutic Massage services and opening the brand’s 250th studio. Additionally, the brand unveiled its “Studio 2.0” design, a modernized interior design package that will be reflected in future studios in the development timeline. In addition to being recognized by Newsweek on its list of America’s Best Companies for Customer Service, Elements Massage also landed on the Forbes list of America’s Best Franchises and the Inc. 5000 list.

12.  Susan Lintonsmith, CEO of Elements Therapeutic Massage, LLC, said, “The Elements Massage system is focused on providing therapeutic massages to help relax, restore and rejuvenate our clients. We strive to address the needs of clients with a personalized massage session in a safe and trusting environment. We are pleased by the positive feedback and will continue to fulfill the brand’s purpose of helping improve the lives of everyone we touch.”

13.  Newsweek examined the ways in which many companies nurture their relationships with consumers, and worked with Statista, a respected global research firm, to collect and analyze data across over 160 retail categories. The compiled rankings reveal the best customer-service companies, with Elements Massage being among the top companies. The Newsweek accolade added to Elements Massage’s national top-tier rankings on the Forbes list of America’s Best Franchises, Inc. 5000, Franchise Times 500, and Entrepreneur’s Franchise 500 ranking.

Company History

14.  Elements Massage was founded in 2002 by Michele Mehrib in Aurora, Colorado. Mehrib already had experience in the massage industry and even started her own business by renting out a room in a country club. However, after the country club was sold to new owners, Mehrib was asked to leave as the new owners didn’t want to offer massage services. After taking some time to recover from her loss, Mehrib decided to take the plunge and rent a retail space to re-start her massage business. Mehrib set out to open a general wellness center that offered services beyond massage therapy.

15.  The first Elements Massage location was a success and Mehrib decided to open a second location in 2005. A year later, Mehrib partnered with Fitness Together – now Wellbiz Brands – to start franchising the Elements Massage concept and push the brand’s growth even further. Since then, Elements Massage has continued to expand around the U.S. and there are now locations all across the country.

Entrepreneur’s Franchise 500

16.  Elements Massage ranked No. 456 on Entrepreneur’s 2020 Franchise 500 list.

Section II – Estimated Costs

• Please click here for detailed estimates of Elements Massage franchise costs, based on Item 7 of the company’s 2020 FDD.

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

• Please click here for detailed information on Elements Massage’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2020 FDD.

Section IV – Number of Franchised and Company-Owned Outlets

Franchised

2017

• Outlets at the Start of the Year:  233
• Outlets at the End of the Year:  245
• Net Change:  +12

2018

• Outlets at the Start of the Year:  245
• Outlets at the End of the Year:  237
• Net Change:  -8

2019

• Outlets at the Start of the Year:  237
• Outlets at the End of the Year:  242
• Net Change:  +5

Company-Owned

2017

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

2018

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  8
• Net Change:  +8

2019

• Outlets at the Start of the Year:  8
• Outlets at the End of the Year:  8
• Net Change:  0

Section V – Financial Performance Representations (Item 19, 2020 FDD) and Analysis

Part 1 – 2019 Average Revenue, Gross Profit Percentage, Number of Rooms, New Client Trials, Conversion Percentage, and Number of Members for Three Categories of Franchised Studios That Were Open as of January 1, 2019, and Operated Throughout 2019

• Part 1 describes 2019 Average Revenue, Average Gross Profit Percentage, Average Number of Rooms, Average New Client Trials, Average Conversion Percentage, and Average Number of Members for three categories of franchised Studios that were open as of January 1, 2019, and operated throughout 2019:

• (1) all franchised Studios that were open as of January 1, 2019, and operated throughout 2019;
• (2) franchised Studios that were open for at least one year as of January 1, 2019, that were open throughout 2019; and
• (3) franchised Studios that were open for at least five years as of January 1, 2019, that were open throughout 2019.

• As of December 31, 2019, there were 250 Studios in operation in the United States. Of those 250 Studios, eight Studios were operated by Elements Massage’s subsidiaries. Of the remaining 242 franchised Studios:

• (1) 231 were open as of January 1, 2019 and operated throughout 2019;
• (2) 226 were open for at least one year as of January 1, 2019, and operated throughout 2019; and
• (3) 137 were open for at least five years as of January 1, 2019, and operated throughout 2019.

• Studios are categorized in the tables below based upon annual revenue.

All Franchised Studios Open as of January 1, 2019 and Operated Throughout 2019

Top 10