EDITOR’S LETTER Franchises are reshaping the market M
assage franchise businesses in the US have permanently changed the spa
industry, drawing new types of consumers to the wellness lifestyle and accelerating the growth of the sector. The model has scaled incredibly
quickly to the point where market leader Massage Envy topped the US$1bn turnover mark last year and will have more than 1,000 spas by the end of 2014, making it a substantial business by any measure. No-one has yet estimated the value or volume of the
crossover business, ie, people who are introduced to the industry via a franchise and go on to become customers of full-service spas and vice versa. T ere’s a need for these numbers to be established now and more importantly, to be tracked given the rapid growth being experienced. T e franchise industry is a highly entrepreneurial one
and investors have been quick to see the potential of the sector. New entrants in the US such as Massage Green Spa, Hand and Stone, Massage Luxe and others are growing quickly and investors right across the international markets starting to see the potential too. Massage is a neighbourhood purchase, with people
typically prepared to travel a 20-30 minutes for a treatment. T is makes it very like the health club model in scale, while the pricing being adopted by massage and facial franchises is also similar to that deployed by volume health club operators. As a result, it seems likely the spa franchise market will turn out to be a similar shape to the health club sector by the time it reaches maturity. On page 34, our experts examine the impact that
franchises are having on the wider spa market. T e debate centres around quality control, market fatigue
Will massage franchises suck the life out of the full-service spa sector and what kind of shape will the industry be in once they’ve scaled?
and staffi ng – are there enough customers to support this many sites and enough therapists to deliver the volume? But the biggest question is whether these businesses
can be sustained without impacting full-service spas. Will they suck the life out of the full-service sector and what kind of shape will the industry be in once they’ve scaled? In the health club industry, where budget off ers have
proliferated, they’re starting to bed down to co-exist in a sustainable way with the high end operations, but have knocked the stuffi ng out of the mid-market. Time will tell whether the same thing happens with spas. Whatever the outcome, spa operators worldwide need to prepare for this change with eyes wide open.
Liz Terry, editor twitter: @elizterry
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