If you are looking towards opening a Massage Envy Franchise, it will be nice for you to have a preview of what the company represents before going ahead to enquire about the total cost of opening the franchise in your location.
Quick Preview
Massage Envy was founded in 2002 and they began franchising in 2003, about 17 years ago. Joe Magnacca is the present CEO of the company and they have their corporate head office at 14350 N. 87th St., #200 Scottsdale, AZ 85260, USA. As of 2017, it has 1,170 franchised locations, employs 25,000 massage therapists and estheticians, and has over 1.65 million members in the United States of America.
The franchisor is ME SPE Franchising, LLC. The franchisor offers franchises to operate a personal health business that offers professional therapeutic massage services, Massage Envy’s proprietary Total Body Stretch service, hot stone massage therapy, customized facial and/or skin care services (including services such as microdermabrasion and chemical peel), all utilizing a unique process and high-end product line, as well as related products and services through a membership-based program in a distinctive, clean and friendly environment.
Massage Envy is the largest chain of franchised massage spas in the United States and they operate with the aim of making massage services more affordable with a membership-based business model. In 2009, the company expanded its services to offer facials and other spa services in many of its locations.
Here are areas where you are expected to spend money and the cost associated with it;
-
Initial Franchise Investment
$28,000 to $45,000
Please note that Massage Envy currently charges an initial franchise fee of $45,000 for the right to operate a Massage Envy Business. If this is your second or subsequent Massage Envy franchise, your initial franchise fee for the new Massage Envy Business will be reduced to $35,000.
Massage Envy participates in the International Franchise Association’s Veterans Transition Franchise Initiative, otherwise known as “VetFran”. As part of VetFran, Massage Envy offers U.S. military veterans discounted initial franchise fees. If you are a veteran, the initial franchise fee is $36,000 ($9,000 discount) for your first franchise. If you are a veteran and you are purchasing your second (or subsequent) franchise, your initial franchise fee for the new Massage Envy Business will be $28,000 ($7,000 discount).
-
Additional Training Fee
$250 per day per person
Please note that if your Managing Owner fails to satisfactorily complete and pass the required initial training program, then Massage Envy reserves the right, in its sole discretion, to require your Managing Owner (or a successor Managing Owner that you appoint and Massage Envy approves) to attend additional training and Massage Envy will charge you an additional training fee of $250 per day per person.
So also, if Massage Envy determines that your Business Manager or any of your employees has failed to satisfactorily complete the initial training program, you agree to immediately submit a substitute and promptly arrange for such person to complete the initial training program to Massage Envy’s satisfaction.
You shall pay the additional training fee for initial training programs furnished to any individual who replaces an employee who has previously attended such training program.
-
Royalty
6% of Gross Sales and the Due Date for this fee is Due on the day of each week Massage Envy specifies.
Please note that this fee is based on Gross Sales during the previous week.
-
Marketing Fund Contributions
2% of Gross Sales and the Due Date for this fee is Due on the day of each week Massage Envy specifies.
-
Regional Advertising Cooperative Contributions
Established by advertising cooperative members and the Due Date for this fee is established by advertising cooperative members.
-
P4 Technology Fees
Currently, charges for all available services would be approximately $1,198 per month for cable-enabled internet, with a higher charge for locations without cable-enabled internet
The Due Date for this fee is Due on the 24th day of the month following the install or receipt of each component associated with the P4 Technology.
Please note that the P4 Technology fees were launched to the franchise network in a phased approach during calendar years 2017-2019, with the final implementation completed February 25, 2019.
-
Massage Envy National Marketing Cooperative
This fee varies and it is dependent on the amount franchisees are required to contribute to support the annual marketing plan. Monies contributed to the National Coop will be credited to franchisee’s Minimum Marketing Spend Requirement on a dollar for dollar basis. For calendar year 2018, the amount to be contributed by franchisees ranges from approximately $1,100 to $1,500.
The Due Date is Due as required by the Massage Envy National Marketing Cooperative Committee.
Please note that the Massage Envy National Marketing Cooperative (“National Coop”) is a cooperative comprised of all current Massage Envy franchisees operating in the United States with responsibility for annually reviewing and approving all marketing plans and programs, including those intended for a national audience or intended to be implemented by a regional cooperative, retention and relationships with advertising agencies and other vendors providing advertising and promotional related services, and major advertising or promotional programs to be implemented during the calendar year by Massage Envy.
The National Coop has the power to require all franchisees to contribute funds for these plans and programs even if these contributions cause franchisees to spend more than their Minimum Marketing Spend Requirement, although that is not the intention of these contributions.
- Advertising Coop Accounting Fee: 1% of Total Monthly Contributions and the Due Date for this fee is Due on the day of each month Massage Envy specifies.
Please note that this fee is charged to the regional cooperative if it requests that Massage Envy provide accounting services for the cooperative.
- Additional Training or Assistance Fee: $250 per person per day, plus expenses and the Due Date for this fee is as incurred.
Please note that Massage Envy provides initial training at no additional charge, but it may charge you for (i) training newly-hired personnel, (ii) refresher training courses, (iii) conventions, and (iv) any additional or special assistance or training you need or request.
- Failure to Attend Convention or Program Fee: For each person who was required to attend, $400 per person per day for the duration of the convention or program and the Due Date for this fee is upon demand.
Please note that if you fail to attend the annual convention, Massage Envy may charge you a fee of up to $400 per day for each person who was required to attend and failed to do so, multiplied by the number of days of the convention.
- Opening Audit Fee: This fee is up to $500, which may be charged to audit and certify a Location’s readiness to open and the Due Date is as deemed necessary by Massage Envy.
- Site Survey Fee: $2,000 to $4,000 (this fee varies depending on scope of construction needed)
Please note that the Due Date is upon execution of the lease for an approved Site, or upon renewal or transfer triggering a required Refresh.
Currently, Massage Envy retains a small portion of this fee ($100) with the remainder being paid by Massage Envy to the third-party vendor who will produce the survey.
Please note that Massage Envy has the right to adjust the portion of the Site Survey Fee Application it retains.
- Refresh Deposit: $6,000 and the Due Date for this fee is prior to your Refresh construction start date.
Please note that the deposit will be held by Massage Envy until the completion of your Refresh, at which time your deposit will be refunded. You are responsible for paying the full balance of the cost of the Refresh in accordance with the vendor’s payment terms.
- Successor Franchise Fee: 2/3 of Massage Envy’s then-current initial franchise fee and the Due Date is before execution of successor Franchise Agreement.
Please note that this fee is due if you enter into a successor Franchise Agreement with Massage Envy.
- Transfer Fee: 2/3 of Massage Envy’s then-current initial franchise fee and the Due Date for this fee is before transfer completed.
The due upon transfer of Franchise Agreement or controlling ownership interest in business entity franchisee.
Please note that for an assignment of a Franchise Agreement to a wholly-owned entity or where the existing owners are reallocating ownership interests among themselves (not more than a controlling ownership interest), Massage Envy will charge you a reduced transfer fee of between $500 to $2,500 to cover its administrative and legal costs to facilitate the transfer.
- Audit: Cost of inspection or audit and the Due Date for this fee is incurred.
Please note that this fee is due only if you do not give Massage Envy reports, supporting records, or other required information on time or you understate Gross Sales by more than 2%.
- Interest: Lesser of 15% per annum or highest commercial contract interest rate law allows and the Due Date for this fee is as incurred.
Please note that this fee is due on all overdue amounts under Franchise Agreement.
- Returned Check Fee: $100 and the Due Date for this fee is as incurred.
Please note that this fee is due each time a check you write to Massage Envy is dishonored.
- Fines: Up to $500 per incident and the due Date for this fee is upon demand.
Please note that this fee is payable if (i) you fail to comply with a mandatory System Standard and you do not cure the non-compliance within the time period Massage Envy requires, (ii) after committing a default under the Franchise Agreement, you commit the same default under the Franchise Agreement within 6 months, or (iii) you fail to operate your Business continuously during normal business hours during any day in which the Business is required to be open and operating without Massage Envy’s consent.
Massage Envy will deposit all fines into the Marketing Fund for the benefit of all franchisees. It is not Massage Envy’s intention to profit from these fines.
- Management Fee: This fee is up to 8% of Gross Sales, plus costs and expenses and the Due Date is as incurred.
Please note that this fee is due if Massage Envy or a Regional Developer manages your Business after your material breach under the Franchise Agreement.
- Costs and Attorneys’ Fees: Will vary with circumstances and the Due Date for this fee is as incurred.
Please note that this fee is due only if you do not comply with the Franchise Agreement.
- Indemnification: Will vary with circumstances and the Due Date for this fee is as incurred.
Please note that you must indemnify Massage Envy and others for any damages incurred if you breach the Franchise Agreement or if Massage Envy and others are sued for claims relating to the operation of your Business.
- New Product or Supplier Testing: Cost of testing and the Due Date for this fee is as incurred.
Please note that this fee covers the costs of testing new products or inspecting new suppliers you propose.
- Insurance: Actual cost of premiums, plus Massage Envy’s costs and expenses and the Due Date for this fee is as incurred.
Please note that if you fail to obtain and maintain the insurance Massage Envy requires, and Massage Envy elects to do so on your behalf, you must reimburse Massage Envy.
- Late Fee and Dishonored Debit Fee: 1.5% per month (late fee); $25 per incidence (dishonored debit fee) and the Due Date for this fee is as incurred.
Please note that late fee is due on all overdue amounts under the Meevo Subscription Agreement; dishonored debit fee is due on each incidence of dishonored debit or instrument of payment for insufficient funds.
- Resale Program Fee: Per each Massage Envy Business: $500 listing fee, plus $100 per month until you sell your Business or terminate Massage Envy’s assistance. Currently, you also pay a commission of up to 4.5% of the sale price if your Business sells. The commission percentage varies depending upon the sale price and the Due Date for this fee is as incurred.
Please note that if you want to sell your Business, Massage Envy currently has a program under which it assists you in marketing your Business and this is a voluntary program. You are not required to participate.
- Rapid Response/D3: $70 per month and the Due Date for this fee is Due on the day of each month Massage Envy specifies.
Please note that Beginning in a staged rollout in 2019, franchisees are required to retain Redirect, LLC and utilize its Rapid Response services when investigating potential code of conduct violations. D3 is a customized incident reporting software for all reportable events, including reporting potential code of conduct violations.
- Veteran Incentives: 20% off franchise fee
- Term of Agreement and Renewal: The length of the franchise term is 10 years. If franchisees are in good standing, and meet other requirements, they may acquire a successor franchise under the then-current terms.
- Financial Assistance: Massage Envy has relationships with third-party sources which offer financing to cover the following: franchise fee, startup costs, equipment, and inventory amongst others.
In Summary,
- Initial investments: $453,323 – $1,059,000
- Net-worth Requirement: $500,000
- Liquid Cash Requirement: $150,000
- Ongoing Initial Franchise Fee: $45,000
- Ongoing Royalty Fee: 6%
- Ad Royalty Fee: 6%