How to Open a Wellness Franchise: A Step-by-Step Guide
Getting into the wellness industry is a smart play. The demand for massage spa franchise services is expanding exponentially.
The American Massage Therapy Association (AMTA) reports the massage therapy industry is an $18 billion industry in the United States and only continues to grow. According to the AMTA, an average of 32.6 million adult Americans received at least one massage in the last year.
Look around, people across the country are busier and more stressed than ever. Everyone is feeling the pressures of their careers and families.
Entering the Industry
Opening a wellness franchise is an exciting prospect. Not only does such a business hold the promise of becoming a thriving source of revenue, but it is valued by the community and clients for its services.
Entrepreneur recently identified the Beauty/Grooming segment, which includes franchise concepts such as massage spas, as one of the hottest franchise categories of 2020.
If you’ve chosen to go with an established wellness franchise company, rather than start from scratch to open an independent business, you already have greatly reduced the number of puzzling questions for which you’ll need to find answers.
Buying an established wellness franchise or health franchise comes with guidance on not just startup but also ongoing day-to-day operations. Being part of a franchise system also brings with it marketing assistance, advantages of relationships with suppliers, and other many other valuable benefits.
Still, at the outset, every entrepreneur entering the wellness franchise world has questions.
Startup Costs to Expect
Each franchise company has a Franchise Disclosure Document (FDD) to enable you to evaluate the company, with a breakdown and range of initial investment costs under Item 7. Costs can vary greatly from franchise to franchise.
For example, even if you were to narrow your choices and seek a franchise agreement with one of the brands listed in Entrepreneur’s list of top Beauty/Grooming brands, you would find yourself looking at brands with claimed startup costs ranging from as low as $21,400 all the way up to $1,400,000. To predict the costs involved in starting your chosen franchise, the FDD is the best resource.
Some franchises even offer a framework for the discovery process, to help make sure you ask the right questions as you form your decision.
You’ll need to choose a business entity: sole proprietorship, LLC, or corporation.
A key reason to structure as a business entity is to limit the liability of your wellness franchise, in the event of client or employee injuries in the course of work as well as in other situations. For instance, when a business is an LLC or corporation and defaults on a loan or must pay a judgment in a lawsuit, the lender or plaintiff can get restitution only from the entity, not from the individual owners’ personal assets. This is not the case in a sole proprietorship.
Some investors may require a “C” corporation structure, but since franchisees do not typically use large outside investors, it is unlikely they would need to be taxed as a “C” corp.
To determine which business form is the most beneficial, consult an attorney and an accountant in your area.
It is always a great idea to talk to other franchisees in the brand’s system and ask what entity type they chose and why.
Generally, each state and locality have specific regulations, ordinances, and laws regarding business operation and specific industries. The local chamber of commerce can likely direct you to the proper agencies you’ll need to talk with.
Ask what licensing, fees, and taxes may apply to your health franchise, as well as requirements for signage, parking, accessibility, and more.
If you open a massage spa franchise, your franchisor, especially a national brand with experience in many states, will be your best advisor regarding what professional licensure is required. But consider confirming your licensing needs with an attorney in your state of operation.
It goes without saying that your therapists will need to be licensed in the state.
Insurance and Liability
Again with the goal of protecting the business in case of liability for injuries, as well as against property damage or loss, your massage spa franchise will need insurance.
Your franchisor may have relationships with national insurers who can give you favorable rates and coverage. If not, consider reaching out to an insurance broker you are familiar with, maybe the one who writes the policy for your auto or homeowner’s insurance, and ask if they offer business insurance. Get quotes from others as well, but focus only on those with experience insuring a wellness franchise or health spa.
Also, regarding liability, your franchisor should supply heavily vetted customer forms, such as liability waivers and intake forms that help limit exposure to liability.
All Systems Go
A wellness franchisor will give owners state-of-the-art management software to coordinate all aspects of the business, including but not limited to scheduling client services, memberships, and sales tracking. It’s one of the biggest advantages you will have as a wellness franchise over independent spas who are just feeling their way through their operating model for the first time.
The system should streamline financial management and reporting for the owners and the franchisor.
Online Presence, Email, and Marketing
Once you are ready to roll into the marketplace, you’ll need a way to reach your customers.
Your health franchise must have a website with, at a minimum, contact information and information about your services. Make sure to set up an email account that is tied with your URL, as this gives a much more professional appearance than using, for example, a gmail.com email address. Check with your franchisor, they should have a domain and email system ready to go for you.
Your website should have strong search engine optimization (SEO). Owners in a franchise system are ahead of the game in this regard, as franchisors typically provide a customizable, SEO-rich website model ready to launch for each location.
Social media is an excellent tool for a wellness or health franchise. Knowing which platform is suited for different needs is the first step. Instagram is a platform best for sharing on-brand photos related to your spa. Facebook is better for getting “shares” and expanding your reach to people who need referrals for a spa.
Look to your franchisor for guidance to help you, as the owner, develop an original marketing program to attract clients and establish a strong referral network — and make sure clients utilize the services frequently and keep coming back. Effective media may include radio, TV, direct mail, print, social media, public relations, phone directory, word-of-mouth, in-spa marketing, and email marketing campaigns.
Hiring the Right Employees
The massage industry continues to evolve as opportunities for therapists grow and diversify. As with so many other aspects of opening a wellness franchise, as a franchisee, you can expect assistance in this area from your franchisor, who has spent years developing expertise in hiring the right people.
Generally speaking, you must vet each prospective employee’s background. Massage therapists typically should have at least 500 hours of training and be licensed in the state of the business. Check their references and run a background check as well.
Consider hiring team members with special certifications who can help your massage spa franchise stand out from other spas.
As you move toward opening your business, utilize your franchisor to help take the guesswork out of each step along the way toward opening your massage spa franchise. After all, that’s what you’re paying them for.
Founded in 2008 in St. Louis, Missouri, MassageLuXe is a fast-growing franchise-based spa company with a mission of delivering the highest quality massage while providing a comfortable, relaxing, and luxurious environment to clients. To further this mission, MassageLuXe also grants clients access to Repechage facials and waxing services.
Massage is a service that improves health, promotes relaxation and overall well-being for the consumer, and has been practiced throughout the world for thousands of years. MassageLuXe currently has 68 locations across 16 states and is planning to expand to 250 locations in the next five years.
For more information about MassageLuXe, please go to https://massageluxe.com/.
To learn more about spa franchise opportunities with MassageLuXe, scroll down to fill out the contact form below.