OPINION M
a ssage Env y s tar ted f ran- chising in 2003, and continues
CG FUNK
to expand at an impressive rate in the US. As of June, Massage Envy had 686 loca- tions off ering massage therapy and facials and around 220 locations in the pipeline. T e average unit size is 3,000sq ſt (279sq
VP industry relations and product development, Massage Envy, US
m), with 12 to 14 treatment rooms. A number of massages are off ered, as well as Murad facials. Massage Envy has a membership programme with monthly fees varying by region – between us$49 to us$59 (€35 to €42, £30 to £37). Members are entitled to a one-hour massage session each month and can receive additional massages at a 40 to 50 per cent discount. Early on, the franchising model was chosen in order to allow for faster expansion and gather partners committed to business growth and development. The spa franchisee fee is us$45,000
(€32,000, £27,950). Financial criteria include a minimum of us$500,000 (€355,750, £310,800) net worth, us$150,000 (€106,750, £93,250) liquid capital and a minimum credit
score of 680. Once a franchise license has been granted, additional investment costs can range from us$340,000 to us$560,000, (€241,950 to €398,500, £211,350 to £348,150) which includes real estate, build out, equip- ment, supplies and working capital. Many support systems are off ered, through
corporate departments and regional develop- ers. Ongoing training relating to operations, marketing, therapist development and serv- ice development are available through fi eld training and a proprietary internal learning management system. In addition, all fran- chisees receive a week of franchise training at our corporate headquarters before opening. We employ 16,000 massage therapists and
1,200 aestheticians nationwide. In the early days, Massage Envy was met with apprehen- sion – schools, therapists and associations didn’t understand our business model and
Massage Envy was a trailblazer in bringing franchising and membership to the spa market. Early success came from visionary leadership and passionate franchisees
S
kin Essentials was formed in 1994, by myself and my wife,
FRANCHISING
employment parameters. Through continued focus and support of associations, conferences, research and media, however, we have now grown positive relation- ships nationally and locally
within the massage and spa industries. A main focus with spa franchising is
ensuring consistency with services and consumer experiences. Massage thera- pists and aestheticians may have their own unique way of providing massage and facial modalities which might be contrary to inter- nal policies, procedures and protocols. By developing inclusive training programmes for massage therapists and aestheticians, as well as front offi ce staff , Massage Envy is able to provide consistent, high-quality serv- ices to its members and guests maintaining brand standards on a large national scale. Massage Envy was a trailblazer in bring-
ing franchising and membership to the spa market. T e company’s early success came from visionary leadership and passionate franchisees committed to the brand. T e continued growth and expansion is due to having a solid business plan, eff ective sup- port and training programmes, creative marketing, service and systems innovation and structured auditing procedures.
Funk has worked in the spa industry since 1992. Details:
www.massageenvy.com.
Kim. It was a modest start: a floor area of just over 200sq ſt (19sq m) within a hair salon. Now we operate 14 beauty salons in Kuala Lumpur and three in other states of Malaysia and have a further 45 franchised salons throughout Malaysia. We grow at an average rate of three beauty spas year. T e sites range from 1,000sq ſt (93sq m)
CHEE KWONG LOW Managing director, Skin Essentials Spas, Malaysia
to 5,000sq ſt (464sq m) and from six to 24 rooms. We off er 10 facials, costing us$23 to us$46 (€16 to €33, £14 to £26), fi sh refl exol- ogy and aromatherapy. We only sell our own skincare products called Herbaline. We collect a franchise training and set up
fee and, thereaſt er, supply products and pro- vide periodic ongoing training and business meetings, sharing the hands-on experience from our 17 beauty spas and 8,000 monthly customers. T e investment franchisees need is around us$4,000 (€2,850, £2,500) per
100sq ſt (9sq m). Typically, in our own beauty spas, we make a return on investment (ROI) within 18 to 24 months. For franchisees it depends on their willingness to learn and attitude at work – we don’t promise them a ROI. We look for sincerity, willingness to learn and to work hard and some business foresight in potential franchisees. Every new therapist has to go through the
same standard training for one month to ensure uniformity in our customer service. Franchising does open up spas to a new
market, but I’m not sure this market is reli- able. In not so well developed countries, including Malaysia, the attitude for beauty and spa franchising is not mature yet and it is diffi cult to create uniformity of service and achieve the same level of customer satisfac-
24 Read Spa Business online
spabusiness.com / digital
tion in all of our franchised beauty spas. Also, we have found that aſt er franchisees have learnt the business from us and have set up a few sites, they then start to establish their own brand.
Franchising was the original plan during
the infant stage, mainly to generate more revenue. But this is not the best way to build a good brand in Malaysia. At present, our 17 branches contribute 75 per cent of the total turnover, while the remaining 45 franchised beauty spas contribute only 25 per cent of our sales turnover. In the last few years, we have stopped
recruiting new franchisees. Now we are putting more eff ort into setting up our own beauty spas and retaining control by giv- ing branch managers the opportunity to run them, which has improved sales and helped build a good brand reputation.
Prior to Skin Essentials, Low was a qualifi ed accountant. Details:
www.herbaline.com.my
SPA BUSINESS 3 2011 ©Cybertrek 2011
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