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

Section I – Estimated initial investment (franchise costs) for a Spavia Day Spa franchise, based on Item 7 of the company’s 2022 FDD

Section II – Initial franchise fee, royalty fee, and marketing fee for a Spavia Day Spa franchise, based on Items 5 and 6 of the company’s 2022 FDD

Section III – Number of franchised and company-owned Spavia Day Spa outlets at the start of the year and the end of the year for 2019, 2020, and 2021, based on Item 20 of the company’s 2022 FDD

Section IV – News updates on the Spavia Day Spa franchise opportunity

Section V – Presentation and analysis of Spavia Day Spa’s financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2022 FDD, including information on the:

• 2021 average, median, high, and low monthly gross sales for (i) the 35 Spavia Day Spa franchised locations that were open and operating for more than 36 months as of December 31, 2021; and (ii) the 15 Spavia Day Spa franchised locations that were open between 13 and 36 months as of December 31, 2021

• 2021 annual gross sales for each of (i) the 35 Spavia Day Spa franchised locations that were open and operating for more than 36 months as of December 31, 2021; and (ii) the 15 Spavia Day Spa franchised locations that were open between 13 and 36 months as of December 31, 2021

• 2021 average gross sales, cost of goods sold, gross profit, occupancy costs (rent, utilities, and repairs and maintenance), other reported operating expenses, royalty fee, fund contribution, technology fee, total expenses, and gross profit less total expenses for (i) the 23 Spavia Day Spa franchised locations that were open and operating for more than 36 months as of December 31, 2021 and provided Spavia with the information needed to compile the disclosure; and (ii) the 5 Spavia Day Spa franchised locations that were open between 13 and 36 months as of December 31, 2021 and provided Spavia with the information needed to compile the disclosure

Section VI – Key ratios, comparables, computations, and analyses for the Spavia Day Spa franchise opportunity (exclusive content for Platinum subscribers)

Section I – Spavia Day Spa Franchise Costs

• Spavia Day Spa franchise costs, based on Item 7 of the company’s 2022 FDD:

• Initial Franchise Fee:  $49,500
• Initial Training Fee:  $5,000
• Travel and Living Expenses During Initial Training:  $500 to $1,000
• Site Selection:  $0 to $2,000
• Security Deposits for Lease and Utilities:  $5,000 to $15,000
• Business Licenses and Permits:  $50 to $1,000
• Professional Fees:  $2,000 to $5,000
• Pre-Construction, Architect, Engineering:  $18,750 to $24,240
• Leasehold Improvements:  $95,750 to $306,000
• Construction Management (Third Party):  $0 to $13,750
• Signage and Graphics:  $8,000 to $12,000
• Equipment and Supplies:  $70,000 to $100,500
• Technology Fee(s) Payable Prior to Opening:  $910
• Additional Funds for 3 Months:  $40,000 to $60,000
• Total Estimated Spavia Day Spa Franchise Costs:  $295,460 to $595,900

Section II – Spavia Day Spa’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

• Spavia Day Spa’s initial franchise fee, royalty fee, and marketing fee, based on Items 5 and 6 of the company’s 2022 FDD:

• Initial Franchise Fee:  $49,500
• Royalty Fee:  6% of Gross Sales
• Local Advertising Requirement:  $50,000 within the first 12 months of operation, with at least $15,000 to $20,000 (as Spavia designates) expended within your first 3 months of operation (your “Initial Marketing Spend”). There is also a Local Advertising Requirement if Minimum Performance Standards are not met.
• Fund Contributions:  1% of Gross Sales
• Advertising Cooperative Fee:  currently, Spavia has not established any such Cooperatives or required its System franchisees to participate in the same

Section III – Number of Franchised and Company-Owned Spavia Day Spa Outlets

Franchised

2019

• Outlets at the Start of the Year:  35
• Outlets at the End of the Year:  45
• Net Change:  +10

2020

• Outlets at the Start of the Year:  45
• Outlets at the End of the Year:  50
• Net Change:  +5

2021

• Outlets at the Start of the Year:  50
• Outlets at the End of the Year:  52
• Net Change:  +2

Company-Owned

2019

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

2020

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

2021

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

Section IV – News Updates on the Spavia Day Spa Franchise

• Spavia Cares 100% Participation for 2021

• Spavia Day Spa Did Not Rank on Entrepreneur’s 2023 Franchise 500 List

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the Spavia Day Spa Franchise (Item 19, 2022 FDD)

• As of December 31, 2021, there were 52 franchised locations (each, a “Franchised Location”) and zero affiliate-owned locations in operation. This Financial Performance Representation excludes financial information in connection with the two Franchised Locations that opened during the 2021 calendar year (the “Measurement Period”).

Part 1 – Average, Median, High, and Low Monthly Gross Sales Generated Amongst Each of Two Subsets of Franchised Locations

• Part 1 of this Item discloses the average, median, high, and low monthly Gross Sales generated by the following subsets of Franchised Locations that are operated in a substantially similar manner to the Franchised Business being offered in the Disclosure Document over the 2021 calendar year (the “Measurement Period”): (i) the 35 Franchised Locations that were open and operating for more than 36 months as of December 31, 2021; and (ii) the 15 Franchised Locations that were open between 13 and 36 months as of December 31, 2021.

36 Months or Longer

• Number of Franchised Locations Comprising the Group:  35
• Average:  $74,918.83
• Median:  $70,707.78
• High:  $136,703.58
• Low:  $33,415.18
• Number That Met or Exceeded Average:  16 (46%)

Between 13 and 36 Months

• Number of Franchised Locations Comprising the Group:  15
• Average:  $54,242.10
• Median:  $42,207.40
• High:  $118,940.34
• Low:  $23,683.41
• Number That Met or Exceeded Average:  5 (33%)

Part 2 – Total Average and Median Gross Sales Generated by the Two Subsets of Franchised Locations Over the Measurement Period

• In Part 2 of this Item, Spavia discloses the total Gross Sales generated over the Measurement Period by each of the Franchised Locations separated in the same two groups as Part 1. Part 2 also discloses the average and median total Gross Sales generated by the Franchised Locations over the Measurement Period.

Franchised Locations Open Between 13 and 36 Months as of the Expiration of the Measurement Period – Gross Sales Generated Over Measurement Period

• Franchised Location 1:  $1,427,284.13
• Franchised Location 2:  $1,289,840.66
• Franchised Location 3:  $869,699.85
• Franchised Location 4:  $845,702.73
• Franchised Location 5:  $820,780.02
• Franchised Location 6:  $568,070.57
• Franchised Location 7:  $556,210.00
• Franchised Location 8:  $506,488.83
• Franchised Location 9:  $482,309.65
• Franchised Location 10:  $452,918.99
• Franchised Location 11:  $430,892.29
• Franchised Location 12:  $419,858.26
• Franchised Location 13:  $418,570.56
• Franchised Location 14:  $390,750.53
• Franchised Location 15:  $284,200.94
• Average:  $650,905.20
• Median:  $506,488.83

Franchised Locations Open More Than 36 Months as of the Expiration of the Measurement Period – Gross Sales Generated Over Measurement Period

• Franchised Location 1:  $1,640,442.90
• Franchised Location 2:  $1,496,143.50
• Franchised Location 3:  $1,401,258.39
• Franchised Location 4:  $1,275,080.30
• Franchised Location 5:  $1,255,625.60
• Franchised Location 6:  $1,247,594.40
• Franchised Location 7:  $1,243,308.73
• Franchised Location 8:  $1,169,919.65
• Franchised Location 9:  $1,129,890.73
• Franchised Location 10:  $1,106,706.30
• Franchised Location 11:  $1,073,338.29
• Franchised Location 12:  $1,041,728.33
• Franchised Location 13:  $949,776.80
• Franchised Location 14:  $941,789.08
• Franchised Location 15:  $923,543.44
• Franchised Location 16:  $922,515.08
• Franchised Location 17:  $854,164.96
• Franchised Location 18:  $848,493.32
• Franchised Location 19:  $831,603.21
• Franchised Location 20:  $798,190.91
• Franchised Location 21:  $795,487.18
• Franchised Location 22:  $774,607.12
• Franchised Location 23:  $772,312.50
• Franchised Location 24:  $713,464.71
• Franchised Location 25:  $688,130.61
• Franchised Location 26:  $676,639.06
• Franchised Location 27:  $632,644.17
• Franchised Location 28:  $632,179.44
• Franchised Location 29:  $576,245.67
• Franchised Location 30:  $554,024.91
• Franchised Location 31:  $548,299.79
• Franchised Location 32:  $548,047.51
• Franchised Location 33:  $513,535.03
• Franchised Location 34:  $488,195.09
• Franchised Location 35:  $400,982.12
• Average:  $899,025.97
• Median:  $848,493.32

Part 3A – Average Gross Sales, Gross Profit, Occupancy Cost, and Other Reported Operational Expenses for Franchised Locations Open More Than 36 Months as of the End of the Measurement Period

• Part 3A of this Item discloses the average, median, high, and low Gross Sales, Gross Profit, Cost of Goods Sold, and other expenses by the Franchised Locations that were open more than 36 months at the beginning of the Measurement Period.

• Part 3A excludes (i) the two Franchised Locations that opened during the Measurement Period, and (ii) 12 Franchised Locations that failed to provide Spavia with the information needed to compile this disclosure.

• Average Gross Sales:  $1,005,309 (100.0%)
• Average Cost of Goods Sold:  $379,858 (37.8%)
• Average Gross Profit:  $625,452 (62.2%)
• Average Occupancy Costs (Rent, Utilities, Repairs and Maintenance):  $148,482 (14.8%)
• Average Other Reported Operating Expenses:  $180,536 (18.0%)
• Average Royalty Fee:  $60,319 (6.0%)
• Average Fund Contribution:  $10,053 (1.0%)
• Average Technology Fee:  $5,460 (0.5%)
• Average Total Expenses:  $404,849 (40.3%)
• Average Gross Profit Less Average Total Expenses:  $220,602 (21.9%)

Part 3B – Average Gross Sales, Gross Profit, Occupancy Cost, and Other Reported Operational Expenses for Franchised Locations Open Between 13 and 36 Months as of the End of the Measurement Period

• Part 3B of this Item discloses the average, median, high, and low Gross Sales, Gross Profit, Cost of Goods Sold, and other expenses by the Franchised Locations that were open between 13-36 months at the beginning of the Measurement Period.

• Part 3B excludes (i) the two Franchised Locations that opened during the Measurement Period, and (ii) 10 Franchised Locations that failed to provide Spavia with the information needed to compile this disclosure.

• Average Gross Sales:  $995,135 (100.0%)
• Average Cost of Goods Sold:  $404,138 (40.6%)
• Average Gross Profit:  $475,349 (47.8%) (Note: There is something wrong with this figure because gross profit should equal gross sales less cost of goods sold.)
• Average Occupancy Costs (Rent, Utilities, Repairs and Maintenance):  $131,460 (13.2%)
• Average Other Reported Operating Expenses:  $188,457 (18.9%)
• Average Royalty Fee:  $59,708 (6.0%)
• Average Fund Contribution:  $9,951 (1.0%)
• Average Technology Fee:  $5,460 (0.5%)
• Average Total Expenses:  $395,036 (39.7%)
• Average Gross Profit Less Average Total Expenses:  $80,312 (8.1%)

• The figures and information presented in this Item 19 are based on the actual and historical performance of the Franchised Locations, and such information was either (a) reported to Spavia by the owners of each Franchised Location, and/or (b) pulled from reports generated by the System’s POS System utilized at each Franchised Location.

• Some outlets have sold these amounts. Your individual results may differ. There is no assurance that you’ll sell or earn as much.

• The term “Gross Sales” for each Franchised Location means the total revenue generated from the sale of Approved Services and Approved Products at that Franchised Location over the applicable Measurement Period.

• The term “Cost of Goods Sold” includes (i) the payroll to employees respectively categorized as specialists, massage therapists, and estheticians of that Spavia Business, along with related payroll taxes and workers’ compensation insurance; (ii) other expenses relating directly to treatment of guests; and (iii) the cost of products procured for sale.

• Gross Profit is calculated by taking the Gross Sales and subtracting the Cost of Goods Sold.

• The term “Occupancy Costs” means the amount expended by that location during the Measurement Period in rent, CAM, utilities, repair and maintenance, and other amounts under the lease for Premises of that location.

• The term “Other Reported Operating Expenses” includes the costs and expenses associated with: (i) advertising/promotional marketing of a Spavia Business; (ii) insurance (including health insurance); (iii) internet and other telecommunications; (iv) office expenses and supplies; (v) non-office supplies; (vi) recruiting expenses; (vii) certain taxes and licenses; (viii) merchant processing fees; and (ix) Technology Fees and Fund Contributions.

• The Royalty Fee was calculated by taking the Gross Sales and multiplying that number by 0.06 since a franchisee’s required Royalty Fee is 6% of Gross Sales.

• The Fund Contribution was calculated by taking the Gross Sales and multiplying that number by 0.01 since a franchisee’s required Fund Contribution is 1% of Gross Sales.

• The Technology Fee was calculated by taking the monthly Technology Fee of $455/month and multiplying that amount by 12.

• Total Expenses is calculated by adding the Occupancy Costs, Other Reported Operating Expenses, Royalty Fee, Fund Contribution, and Technology Fee.

• Total Profit Less Total Expenses is calculated by taking the Total Profit and subtracting the Total Expenses.

Section VI – Spavia Day Spa Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️