Spavia Day Spa Franchise Costs: Estimated Initial Investment (Item 7, 2021 FDD)

1.  Initial Franchise Fee:  $49,500

2.  Initial Training Fee:  $5,000

3.  Travel and Living Expenses During Initial Training:  $500 to $1,000

• This is Spavia’s estimated range of costs to cover the travel and living expenses, including airfare, transportation costs, lodging, and meals, associated with you and your designated trainees attending the portion of the Initial Training Program that is conducted at Spavia’s designated training facility (currently in Colorado).

• This estimate does not include any wages or salary for you or your trainees during training.

• The low estimate assumes that you will attend Spavia’s proprietary training program, while the high estimate assumes that up to 3 total individuals (including you) will be attending this initial training.

4.  Site Selection:  $0 to $2,000

5.  Security Deposits for Lease and Utilities:  $5,000 to $35,000

• These are estimated amounts that a new franchisee can expect to expend on security deposits associated with the lease for the Premises of the Franchised Business, as well as the utilities associated with operations.

6.  Business Licenses and Permits:  $50 to $1,000

• You are required to obtain all business licenses, permits, certificates, or approvals before you start business. Local, municipal, county, and state regulations vary on what licenses and permits are required by you to operate.

7.  Professional Fees:  $2,000 to $5,000

8.  Pre-Construction, Architect, Engineering:  $18,750 to $24,240

9.  Leasehold Improvements:  $95,755 to $309,505

• You will need to construct or “build out” the Premises at which you will operate your Franchised Business. Construction costs for recently-developed franchised Day Spas, net of the average tenant improvement allowance, have ranged from $81 to $111 per square foot, and such costs have depended on size of the Day Spa, building type, property, and location.

• The target size of Day Spa ranges from 2,200 to 2,800 square feet, with Spavia’s recommended size being closer to 2,800 sq. ft. that is capable of accommodating around 10 treatment rooms.

10.  Construction Management (Third Party):  $0 to $13,750

• You may elect to manage the construction of the Franchised Business yourself, but Spavia typically recommends you engage a third-party provider that specializes in construction management services, including dealing with the general contractor and other parties responsible for the construction and buildout of your Day Spa.

• The low end of this range assumes that you will manage the construction yourself. The high end of this range assumes that you will engage a third party to provide these services and is, in part, based on estimates Spavia has received from vendors that it and its System franchisees have worked with in the past.

11.  Signage and Graphics:  $5,000 to $15,000

• This is the estimated range for you to purchase the necessary exterior signage to display at your Franchised Business from Spavia’s approved third-party supplier, as well as the related installation costs.

12.  Equipment and Supplies:  $70,000 to $95,000

• You must purchase certain of the millwork, furniture, fixtures, equipment, and other items necessary to outfit and equip your Day Spa from Spavia’s approved third-party supplier (the “FFE Package”).

• This range also includes the costs associated with acquiring all other furniture, fixtures, equipment, and supplies necessary to equip your Day Spa in accordance with Spavia’s System standards, and operate for a period of 3 months.

13.  Technology Fee(s) Payable Prior to Opening:  $910

• This includes 2 payments of the Technology Fee which is paid to Spavia beginning 2 months prior to opening your Franchised Business.

14.  Additional Funds for 3 Months:  $40,000 to $80,000

• You will need additional capital to support on-going expenses during the initial 3 months after you open your Franchised Business.

• The estimate includes items such as payroll, royalty, additional advertising, Technology Fees (ongoing post-opening), repairs and maintenance, bank charges, miscellaneous supplies and equipment, state tax, and other miscellaneous items, that may not be covered by sales revenues.

• This range does not include any draw or salary for you. These figures are estimates and Spavia cannot guarantee that you will not have additional expenses in the first 3 months you are operating your Franchised Business.

15.  Total Estimated Initial Investment:  $292,465 to $636,905

• The figures above are only estimates. Spavia’s estimates are based on its experience, the experience of its affiliates, and its current requirements for Spavia franchises.