Squeeze: $1.78M Annual Sales vs. $543K-$889K Franchise Cost

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

Section I – Estimated initial investment (franchise costs) for a Squeeze franchise, based on Item 7 of the company’s 2023 FDD

Section II – Initial franchise fee, royalty fee, and marketing fee for a Squeeze franchise, based on Items 5 and 6 of the company’s 2023 FDD

Section III – Number of franchised and company-owned Squeeze outlets at the start of the year and the end of the year for 2020, 2021, and 2022, based on Item 20 of the company’s 2023 FDD

Section IV – News updates on the Squeeze franchise opportunity

Section V – Presentation and analysis of Squeeze’s financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2023 FDD, including information on the:

• 2022 total active members, total service hours, 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, general manager labor, maitre d’ labor, guest experience 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, insurance expense, total expenses, and EBITDA for the affiliate-owned Squeeze shop in Studio City, California

• % of service hours (member rate), average total revenue per member service hour, % of service hours (non-member rate), average total revenue per non-member service hour, number of credit card transactions per $100 in charged volume, tips (as a percentage of total revenue), massage therapist massage rate payroll load factor, massage therapist admin rate and general manager payroll load factor, and maitre d’ payroll load factor for the affiliate-owned Squeeze shop in Studio City, California from December 1, 2021 to December 31, 2022

• shop utilization rates adjusted for various suite counts based upon operation of the affiliate-owned Squeeze shop in Studio City, California from December 1, 2021 to December 31, 2022

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

Section I – Squeeze Franchise Costs

• Squeeze franchise costs, based on Item 7 of the company’s 2023 FDD:

• Initial Franchise Fee:  $60,000
• Grand Opening Plan:  $18,300 to $41,300
• Travel and Living Expenses While Training:  $200 to $2,950
• Leasehold Improvements:  $206,545 to $347,871
• Architect/Engineer/Permits and Licenses:  $31,000 to $59,500
• Legal/Professional Fees:  $5,000 to $10,000
• Project Management Fee:  $20,000 to $25,000
• Prepaid Rent, Security, and Other Deposits:  $1,000 to $15,000
• Initial Liability Insurance and Workers’ Compensation Deposit:  $1,000 to $3,500
• Exterior Signage:  $11,000 to $31,000
• Technology Start-up Fee:  $1,500
• Opening Inventory and Supplies Not Otherwise Noted:  $19,800 to $20,400
• Furniture, Fixtures, and Equipment:  $65,300 to $92,500
• Additional Funds (Initial 3-6 Month Period):  $103,000 to $179,000
• Total Estimated Squeeze Franchise Costs:  $543,645 to $889,521

Section II – Squeeze’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

• Squeeze’s initial franchise fee, royalty fee, and marketing fee, based on Items 5 and 6 of the company’s 2023 FDD:

• Initial Franchise Fee:  $60,000
• Royalties:  6% of Net Sales
• Brand Fund Contribution:  2% of Net Sales
• Local Store Marketing Fee:  $1,500 per month
• Cooperative Marketing Fee:  up to 2% of weekly Net Sales, plus any fees that Squeeze may charge for administering, managing, and governing the Regional Co-op

Section III – Number of Franchised and Company-Owned Squeeze Outlets

Franchised

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

2022

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  2
• Net Change:  +2

Company-Owned

2020

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

2021

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

2022

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

Section IV – News Updates on the Squeeze Franchise

• Drybar Founders Take on the Massage Industry with Squeeze

• Massage Franchise Squeeze Takes App-Based Approach to Massage Therapy

• Squeeze Massage Enters Illinois Market with Northbrook Location

• Squeeze Massage Franchise Expansion Empowered by Occupier

• Squeeze Did Not Rank on Entrepreneur’s 2024 Franchise 500 List

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the Squeeze Franchise (Item 19, 2023 FDD)

Part 1 – Total Active Members, Total Number of Service Hours, Total Revenue, Expenses, and EBITDA for One Affiliate-Owned Squeeze Shop in Studio City, California for 2022

Total Active Members (end of period):  901

Total Service Hours:  19,482

Revenue

• Appointments Revenue:  $582,144 (32.7%)
• Membership Revenue:  $1,119,603 (62.9%)
• Refunds Given:  $(53,413) (-3.0%)
• Gift Card Redeemed Revenue:  $116,240 (6.5%)
• Guest Discounts and Promotions Revenue:  $15,536 (0.9%)
• Other Revenue:  $0 (%)
• Total Revenue:  $1,780,110 (100.0%)

Expenses

• Royalty Fee – Estimated:  $105,823 (5.9%)
• Credit Card Fees:  $64,484 (3.6%)
• Guest Amenities:  $20,022 (1.1%)
• Laundry Service:  $30,331 (1.7%)
• Office Supplies/FF&E:  $13,173 (0.7%)
• Therapist Labor:  $767,646 (43.1%)
• General Manager Labor:  $86,588 (4.9%)
• Maitre D’ Labor:  $108,483 (6.1%)
• Guest Experience Fee – Estimated:  $14,400 (0.8%)
• Recruiting/Training/Culture:  $17,772 (1.0%)
• Base Rent:  $196,666 (11.0%)
• Free Rent Reductions:  $0 (0%)
• Rent – NNN:  $59,067 (3.3%)
• Utilities/Internet:  $18,591 (1.0%)
• Cleaning Service/Supplies:  $17,420 (1.0%)
• Brand Fund Fee – Estimated:  $35,274 (2.0%)
• Digital Marketing:  $21,076 (1.2%)
• Collateral/Swag/Guest Gifts:  $5,645 (0.3%)
• Guest Discounts and Promotions Expense:  $15,536 (0.9%)
• Technology Fee – Estimated:  $23,400 (1.3%)
• HR/Payroll/Other Tech Services:  $7,443 (0.4%)
• Finance/Accounting and Legal:  $11,000 (0.6%)
• Insurance Expense:  $46,523 (2.6%)
• Total Expenses:  $1,686,367 (94.7%)

EBITDA:  $93,743 (5.3%)

• Total Active Members means the total number of active membership agreements for the Squeeze Shop as of the last day of the reflected time period.

• Total Service Hours means the total number of massage hours that were sold for the Squeeze Shop within that month. Note, a 50-minute service equals 1 service hour and an 80-minute service equals 1.5 service hours. The additional 10 minutes added to each service accounts for the recovery time between services.

• Total Revenue means Appointments Revenue plus Membership Revenue plus Gift Card Redemption Revenue and Promotions Revenue minus refunds given.

• Royalty Fees, Guest Experience Fees, and Brand Fund 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 Total Revenue for each period in the financial performance representation.

• Margin % is calculated by dividing EBITDA by Total Revenue for each period 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.

• Real estate, labor, and related expenses are higher in Los Angeles, California than in other parts of the United States. Depending upon the location of your Squeeze Shop, your real estate, labor, and other expenses may be less than Squeeze incurs at this location in Los Angeles, California.

• Population density in the greater Los Angeles area including Studio City, California is denser than other parts of the United States. Your customer base may be smaller or further away from your Squeeze Shop depending upon the market in which you locate your Squeeze Shop.

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

Part 2 – Shop Utilization Rate Adjusted for Various Suite Counts Based Upon Operation of One Affiliate-Owned Squeeze Shop in Studio City, California from December 1, 2021 to December 31, 2022

• 12 Suites:  31.9%
• 11 Suites:  34.8%
• 10 Suites:  38.3%
• 9 Suites:  42.4%
• 8 Suites:  47.1%
• 7 Suites:  52.5%
• 6 Suites:  58.4%

• Shop Utilization Rate is calculated by dividing the total service hours in a given time period by operating hours per day multiplied by the number of operating days in the given time period multiplied by the number of suites.

• Between March 18, 2019 and February 29, 2020, the affiliate owned Squeeze shop in Studio City, California had 11 massage suites. Following the COVID-19 pandemic related closure on March 15, 2020, it converted an existing space into a 12th massage suite.

• The Shop Utilization Rates in the above table reflect the activity, on a percentage basis, that would have occurred within the Studio City Squeeze Shop if it had less suites, based upon the actual service hours performed at the Studio City Squeeze Shop during the given time period. This is calculated by analyzing each service that took place during the given time period and eliminating overlapping services that exceed the referenced number of suites. The remaining total service hours are then used to calculate the corresponding Shop Utilization Rate if the Shop had a different number of suites.

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

Part 3 – Service Hours, Average Hourly Revenue, Credit Card Fee Related Metrics, and Employee Load Factors on a Category Basis for One Affiliate-Owned Squeeze Shop in Studio City, California from December 1, 2021 to December 31, 2022

• % of Service Hours (Member Rate):  64.4%
• Average Total Revenue per Member Service Hour:  $90.53
• % of Service Hours (Non-Member Rate):  35.6%
• Average Total Revenue per Non-Member Service Hour:  $93.65
• Number of Credit Card Transactions per $100 in Charged Volume:  1.47
• Tips (as a % of Total Revenue):  17.26%
• Massage Therapist Massage Rate Payroll Load Factor:  7.26%
• Massage Therapist Admin Rate and General Manager Payroll Load Factor:  3.16%
• Maitre D’ Payroll Load Factor:  6.45%

• The financial performance representation above reflects historical data for one Squeeze Shop in Studio City, California that opened on March 18, 2019. It is the only Squeeze Shop that was opened for the entire time period for which this financial representation is made.

• % of Service Hours (Member Rate) is the percentage of Service Hours that were performed for members from December 1, 2021 to December 31, 2022.

• Average Total Revenue per Member Service Hour are calculated by dividing the applicable category of revenue by the number of service hours expended in collecting the category of revenue from December 1, 2021 to December 31, 2022.

• % of Service Hours (Non-Member Rate) is the percentage of Service Hours that were performed for non-members from December 1, 2021 to December 31, 2022.

• Average Total Revenue per Non-Member Service Hour are calculated by dividing the applicable category of revenue by the number of service hours expended in collecting the category of revenue from December 1, 2021 to December 31, 2022.

• Number of Credit Card Transactions per $100 in Charged Volume is calculated by dividing the total charged volume by $100, divided by the number of credit card transactions that occurred from December 1, 2021 to December 31, 2022.

• Tips (as a % of Total Revenue) is calculated by dividing the total tips collected by the total revenue from December 1, 2021 to December 31, 2022.

• Massage Therapist Massage Rate Payroll Load Factor is calculated by dividing the sum of costs related to sick leave, paid time off, workers’ compensation insurance, and bonuses by the sum of massage related pay from December 1, 2021 to December 31, 2022.

• Massage Therapist Admin Rate and General Manager Payroll Load Factor is calculated by dividing the sum of workers’ compensation insurance costs by the sum of Massage Therapist Admin and General Manager base pay from December 1, 2021 to December 31, 2022.

• Maitre D’ Payroll Load Factor is calculated by dividing the sum costs related to sick leave, paid time off, workers’ compensation insurance, and bonuses by the sum of Maitre D’ base pay from December 1, 2021 to December 31, 2022.

• This particular time period was utilized because it reflects performance after COVID-19’s most significant economic impacts related to the Studio City Squeeze Shop and reflects, in the franchisor’s opinion, reasonable performance expectations in a post-COVID business environment.

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

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