FDD Talk: How Much Does a Squeeze Massage Franchise Make (Average Revenues and/or Profits)?

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

• Section I – Background information on the Squeeze Massage franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a Squeeze Massage franchise, based on Item 7 of the company’s 2021 FDD

• Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Squeeze Massage franchise, based on Items 5 and 6 of the company’s 2021 FDD

• Section IV – Number of franchised and company-owned Squeeze Massage outlets at the start of the year and the end of the year for 2018, 2019, and 2020, based on Item 20 of the company’s 2021 FDD

• Section V – Presentation and analysis of Squeeze Massage’s financial performance representations, based on Item 19 of the company’s 2021 FDD, including information on the:

• average monthly number of unique 1st-time guests, average monthly number of unique returning guests, average monthly total service hours, and total active members (at the end of 11th month) for the affiliate-owned Squeeze Massage shop in Studio City, California during its first 11 months of operation, and the total numbers for months 12-21

• appointments revenue, membership revenue, refunds given, gift card redeemed revenue, guest discounts and promotions revenue, other revenue, total revenue, royalty fee (estimated), credit card fees, guest amenities, laundry service, office supplies/FF&E, therapist labor, shop manager labor, maitre d’ labor, guest services fee (estimated), recruiting/training/culture, base rent, free rent reductions, rent – NNN, utilities/Internet, cleaning service/supplies, brand fund fee (estimated), digital marketing, collateral/swag/guest gifts, guest discounts and promotions expense, technology fee (estimated), HR/payroll/other tech services, finance/accounting and legal, licenses, permits and incorporation fees, insurance expense, total expenses, and EBITDA for the affiliate-owned Squeeze Massage shop in Studio City, California during its first 11 months of operation, and during months 12-21

Section I – Background Information

12 Things You Need to Know About the Squeeze Massage Franchise

Launches Franchising Nationwide

1.  In mid-May 2021, Squeeze announced its aggressive growth strategy of having more than 30 franchise units in development by the end of 2021. Brittany Driscoll, former vice president of marketing that helped Drybar become America’s iconic symbol of hair blowouts, has set the stage for Squeeze to become a household name through the launch of a strategic franchise expansion phase. In the long-term, Driscoll’s vision is to have more than 300 units sold within the next three to five years.

2.  Driscoll, co-founder and CEO of Squeeze, said, “At Squeeze, we’re all about making our guests and team members feel their best, and we are committed to ensuring that same feel-good experience for our franchisees. Our franchise owners have the opportunity to bring our welcoming and empowering culture to their local community and provide a refreshing, relaxing experience for each guest.”

3.  Despite pandemic pressures, the original L.A. Squeeze location maintained its endearing connection to a loyal fan base that repeatedly demonstrated its adoration during the past year. Through pleas to open amid COVID operating restrictions and endless swooning on social media, Squeeze wore its heart on its sleeve for those impacted and empathized with its member community. Back open, Squeeze in L.A. is once again fueling the “Feel-Good Revolution” through its guest and team member experience.

4.  Alli Webb, Drybar and Squeeze co-founder who also advises on the company’s strategic vision, added, “We launched Squeeze with the intention of growing the brand to hundreds of locations nationally. The experience and learnings we have had growing Drybar to more than 150 locations has uniquely prepared us to empower franchisees with world class systems and tools for ultimate success.”

Expands Across the Country by Signing Five Franchise Agreements

5.  In early March 2022, Squeeze announced that it had signed several new franchise deals in Scottsdale, Nashville, Westlake Village, Dallas, and San Antonio. Squeeze, the hit massage concept filling the gap between expensive high-end luxury spas and discount chains with its revolutionary app and personalized massage experience, has partnered with world-class operating partners to bring a way better massage experience to their communities.

6.  The five franchisees are entering the system with years of experience in senior leadership positions, proven success running multi-million departments at Fortune 10 companies, as well as impressive track records in the start-up, technology, and financial sectors, instilling strong confidence in the growing brand.

7.  Brittany Driscoll, co-founder and CEO of Squeeze, said, “I am so proud and honored to welcome such impressive operating partners to our growing team. We built this brand with our future franchisees in mind so I couldn’t be more excited to watch our vision come to life and resonate with amazing operators across the country. There’s a lot more coming down the pipeline and we are excited to keep the momentum of The Feel-Good Revolution going.”

8.  The brand’s first franchise in Scottsdale, Arizona is set to open in late 2022, followed by Nashville, Dallas, Westlake Village, and San Antonio. Through the growth and franchise opportunity Squeeze has built, the brand was also recognized last year by Franchise Journal as a top franchise for 2021.

Company History

9.  Squeeze was founded in 2018, but not officially launched until early 2019, by Alli Webb and her brother Michael Landau (who are the co-founders of Drybar) and Brittany Driscoll (former vice president of marketing for Drybar) in Studio City, California. The massage concept is unique and centered around an app-based booking and payment platform.

10.  Webb and Landau felt that there was room in the massage industry for a completely personalized and customizable massage experience at an affordable price point. The company was open for just 11 months before the COVID-19 pandemic hit, but Squeeze saw a lot of success in those first 11 months.

11.  Due to the COVID-19 pandemic, Squeeze hit a snag with selling franchises. Currently, only the original Squeeze location in Studio City is open, but several new locations are slated to open by the end of 2022. Additionally, Squeeze is seeking franchisees around the United States.

Entrepreneur’s Franchise 500

12.  Squeeze did not rank on Entrepreneur’s 2022 Franchise 500 list.

Section II – Estimated Costs

• Detailed estimates of Squeeze Massage franchise costs, based on Item 7 of the company’s 2021 FDD.

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

• Detailed information on Squeeze Massage’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2021 FDD.

Section IV – Number of Franchised and Company-Owned Outlets

Franchised

2018

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

2019

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

2020

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

Company-Owned

2018

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

2019

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

2020

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

Section V – Financial Performance Representations (Item 19, 2021 FDD) and Analysis

• The financial performance representation below reflects Gross Revenue and Expenses for one Squeeze Shop in Studio City, California that opened on March 18, 2019. It is the only Squeeze Shop in operation at the time that this financial performance representation is made.

• Total Active Members for months 12-21 is N/A because all active memberships were paused during months 12-21 as a direct result of the COVID-19 pandemic.

• The financial performance representation reflects total results from March 18, 2019 to February 29, 2020 and total results from March 1, 2020 through December 31, 2020.

• There was minimal activity during the March 1, 2020 through December 31, 2020 period because of repeated closures of the Squeeze Shop as a result of the COVID-19 pandemic and the requirements of local and state officials.

• Labor costs fluctuate month-to-month depending on the number of payroll periods taking place within that month.

• Royalty Fees, Guest Services Fees, Brand Fund Fees, and Technology Fees are estimated in the financial performance representation as this affiliate-owned Squeeze Shop does not pay those fees to the franchisor.

• EBITDA is calculated by subtracting Total Expenses from Gross Revenue for the periods represented in the financial performance representation.

• Margin % is calculated by dividing EBITDA by Gross Revenue for the periods represented in the financial performance representation.

• This financial performance representation is based upon financial reports maintained by the franchisor’s affiliate. The franchisor has not audited the results.

• One Squeeze Shop has generated the results below. Your individual results may differ. There is no assurance that you’ll sell or earn as much.

Months 1-11 (March 18, 2019 to February 29, 2020)

• Average Monthly Number of Unique 1st-Time Guests:  504
• Average Monthly Number of Unique Returning Guests:  830
• Average Monthly Total Service Hours:  1,612
• Total Active Members (End of 11th Month):  963

Revenue

• Appointments Revenue:  $615,986 (39.8%)
• Membership Revenue:  $697,122 (45.0%)
• Refunds Given:  ($59,148) (-3.8%)
• Gift Card Redeemed Revenue:  $118,468 (7.7%)
• Guest Discounts and Promotions Revenue:  $171,641 (11.1%)
• Other Revenue:  $4,023 (0.3%)
• Total Revenue:  $1,548,092 (100.0%)

Expenses

• Royalty Fee – Estimated:  $82,587 (5.3%)
• Credit Card Fees:  $55,189 (3.6%)
• Guest Amenities:  $25,925 (1.7%)
• Laundry Service:  $24,138 (1.6%)
• Office Supplies/FF&E:  $20,153 (1.3%)
• Therapist Labor:  $567,819 (36.7%)
• Shop Manager Labor:  $71,222 (4.6%)
• Maitre D’ Labor:  $77,425 (5.0%)
• Guest Services Fee – Estimated:  $13,200 (0.9%)
• Recruiting/Training/Culture:  $28,017 (1.8%)
• Base Rent:  $165,832 (10.7%)
• Free Rent Reductions:  ($69,092) (-4.5%)
• Rent – NNN:  $38,035 (2.5%)
• Utilities/Internet:  $21,342 (1.4%)
• Cleaning Service/Supplies:  $19,593 (1.3%)
• Brand Fund Fee – Estimated:  $27,529 (1.8%)
• Digital Marketing:  $36,212 (2.3%)
• Collateral/Swag/Guest Gifts:  $14,591 (1.0%)
• Guest Discounts and Promotions Expense:  $172,996 (11.2%)
• Technology Fee – Estimated:  $21,450 (1.4%)
• HR/Payroll/Other Tech Services:  $10,190 (0.7%)
• Finance/Accounting and Legal:  $9,188 (0.6%)
• Licenses, Permits, and Incorporation Fees:  $1,533 (0.1%)
• Insurance Expense:  $18,735 (1.2%)
• Total Expenses:  $1,453,809 (93.9%)

EBITDA:  $94,283 (6.1%)

Months 12-21 (March 1, 2020 through December 31, 2020)

• Total Number of Unique 1st-Time Guests:  231
• Total Number of Unique Returning Guests:  1,061
• Total Service Hours:  1,764
• Total Active Members (End of 21st Month):  N/A

Revenue

• Appointments Revenue:  $41,252 (27.1%)
• Membership Revenue:  $157,840 (103.8%)
• Refunds Given:  ($61,361) (-40.4%)
• Gift Card Redeemed Revenue:  $9,258 (6.1%)
• Guest Discounts and Promotions Revenue:  $4,960 (3.3%)
• Other Revenue:  $53 (0.0%)
• Total Revenue:  $152,002 (100.0%)

Expenses

• Royalty Fee – Estimated:  $8,823 (5.8%)
• Credit Card Fees:  $7,985 (5.3%)
• Guest Amenities:  $1,248 (0.8%)
• Laundry Service:  $2,714 (1.8%)
• Office Supplies/FF&E:  $5,112 (3.4%)
• Therapist Labor:  $85,449 (56.2%)
• Shop Manager Labor:  $18,525 (12.2%)
• Maitre D’ Labor:  $15,681 (10.3%)
• Guest Services Fee – Estimated:  $12,000 (7.9%)
• Recruiting/Training/Culture:  $3,581 (2.4%)
• Base Rent:  $153,955 (101.3%)
• Free Rent Reductions:  ($64,148) (-42.2%)
• Rent – NNN:  $42,088 (27.7%)
• Utilities/Internet:  $4,980 (3.3%)
• Cleaning Service/Supplies:  $4,544 (3.0%)
• Brand Fund Fee – Estimated:  $2,941 (1.9%)
• Digital Marketing:  $1,727 (1.1%)
• Collateral/Swag/Guest Gifts:  $171 (0.1%)
• Guest Discounts and Promotions Expense:  $4,960 (3.3%)
• Technology Fee – Estimated:  $19,500 (12.8%)
• HR/Payroll/Other Tech Services:  $2,462 (1.6%)
• Finance/Accounting and Legal:  $7,425 (4.9%)
• Licenses, Permits, and Incorporation Fees:  $290 (0.2%)
• Insurance Expense:  $1,561 (1.0%)
• Total Expenses:  $343,573 (226.03%)

EBITDA:  -$191,571 (-126.03%)

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