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March/April 2010 Issue

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The Impact on the Profession

Massage Franchises

By Karrie Osborn
[Feature]

When massage franchise businesses first arrived in the United States, some independent practitioners feared retail massage would put them out of business, force them to lower their prices to compete, and hurt the profession as a whole. Today, however, experts say massage franchises have come to fill crucial roles within the profession. Even as complaints of low wages and under-skilled therapists linger, others herald the fact that franchise businesses make massage accessible in a way it’s never been, and provide much-needed job opportunities at the same time.

The Corporate Players

What started as the effort of one company opening its first franchise eight years ago has today grown into a franchise frenzy where at least a dozen national massage franchisors are building their brands from the
ground up.

When you consider the expansion of retail massage outlets and the fact that many of these sites are being opened by business and franchising veterans, it becomes readily apparent that massage is now a lucrative investment for entrepreneurs of all shapes and sizes. While there are a variety of massage franchises now dotting the landscape, the largest are Massage Envy and Elements Therapeutic Massage.

Massage Envy

The first company to lay a path and create a massage franchise model in the United States was Massage Envy. After 30 years in the fitness industry, John Leonesio saw the opportunity massage offered and in 2002 designed the Massage Envy concept in Scottsdale, Arizona, to resemble the health club membership model. Now owned by Sentinel Capital, a middle-market private equity firm, Massage Envy’s original concept—to make the health benefits of massage both convenient and affordable—remains and has earned the company several distinctions, including the 23rd spot in Entrepreneur magazine’s 2010 Fastest Growing Franchises.

Today, the company has 606 locations in 42 states, with another 204 franchise licenses in development.  According to CG Funk, Massage Envy vice president of industry relations and product development, Massage Envy is the largest employer of massage therapists in the United States (15,000 therapists/staff), and in 2009 generated more than $450 million combined totals in sales.

The Massage Envy model is based on membership, where clients pay a fee ($49–$69, depending on the region) for a monthly massage, and can then buy additional massages at a reduced $39–$49 rate. Funk says there are nearly 700,000 Massage Envy members, and clinics are open seven days a week to serve them, offering hours from early morning to late evening.

Although portability of membership benefits extends to all Massage Envy locations, Funk says each clinic is an individually owned business. Therapist salaries are set by each owner, as are benefits and work environment. What Massage Envy corporate brings to the table is help with marketing materials, client protocols, hiring policies, and other business management resources. In return, individual owners pay franchise and royalty fees back to Massage Envy corporate.

Being the first to market with their franchise concept, Funk says Massage Envy got a head start on its competition when it comes to developing the network and building the footprint. Part of the next wave of growth for Massage Envy will likely come from its new Massage Envy Spa concept. Launched nationally in 2009, Massage Envy Spa now has 74 locations across the United States; an additional 52 Massage Envy Spa locations are in development.

Funk says many view Massage Envy as a giant corporation, but at the franchisee level, it’s far from it. “These are small business owners who chose to have a Massage Envy over other franchises because they believe in health and wellness,” she says. “More and more Americans are using massage as a method for stress reduction and maintaining health, so to offer them an affordable way to receive massage on a regular basis is a win for the clients and our clinics.”

Massage Envy has taken a leadership role in the profession with respect to philanthropy and helped raise the visibility of massage among consumers. For instance, it has donated $50,000 in total support to the Massage Therapy Foundation since 2008, raised more than $1.3 million for breast cancer by sponsoring Massage for the Cure single-day events, and, in 2009, brought in $546,616 for Susan G. Komen for the Cure.

Elements Therapeutic Massage

When massage therapist Michele Merhib opened her first massage studio in Colorado, little did she know how it would evolve. Over the course of two years, and with only word-of-mouth advertising, Merhib’s four-room office was providing 650 massages a month. When investors came calling after her second studio opened, one of Merhib’s conditions of sale was she wanted to positively impact how therapists would be treated. It was the continuation of a philosophy she believes made the venture successful in the first place. That concept became Elements. Merhib sold her business in 2006, but still owns three Elements studios and serves as a consultant to the company.

Representing the number two massage franchise organization, Elements executives are mindful of their competitor’s early efforts. “We give kudos to Massage Envy,” says Jeff Jervik, president and CEO of Elements. “They entered into a lot of markets where it was still difficult—where the perception was that there was something shady going on behind those closed doors. Massage Envy has been able to help change that for the good of the industry. That’s made it so that companies, such as ours, can be successful.”

The Elements model, which has 75 locations in 22 states, is also a membership program where clients pay $49–$59 per massage, depending on location. Despite the fact that disposable income is being heavily impacted in this economy, Jervik says business continues to chug along. “We’ve seen some very good growth in a very difficult economy. All four of our franchise classes—2006, 2007, 2008, 2009—are growing at a good pace. That tells me there are a great number of people who understand what massage therapy does from a health standpoint,” he says.

“Retail massage has brought an acceptance and we’ve been able to build on that—not just from relaxation, but from health benefits of what it means to get frequent massages.”

A Broad Playing Field

Several massage franchisors have cropped up in the last eight years, most following the model that Massage Envy created. Some have designed themselves with a spa focus, others have a global expansion plan in place, but all are planning for growth.

For John Marco, a physical therapist for 25 years, it was seeing the growing acceptance of massage that inspired him to create and then franchise his Hand and Stone Massage and Facial Spa in 2006. Now, with 30 locations in the United States and Canada and 25 more expected to open in 2010, Marco says the franchising of massage services has forever changed the profession. “What franchising has done is allow many people to experience massage and realize the lifestyle is good for them.” He says the franchise paradigm is forcing people to consider that massage is affordable, convenient, and meant for them, too.

Employing more than 600 MTs, the Hand and Stone founder predicts that massage franchises will one day dominate the entire profession. “And that’s a good thing,” he says. “It’s going to improve the service.” Marco says franchises, for example, dominate the hotel industry for a reason. Are consumers more comfortable staying at a Sheraton Hotel or Joe’s Roadside Inn? “When you go to a hotel, I’m certain you’re going to look for a name you trust.” He says the secret to franchising is the expectation of the brand. “You have an expectation of what you’re going to get, and that’s the job of a franchise.”

Opening the Door

While the number of Americans getting frequent massage continues to grow, there are still more than 120 million U.S. consumers who have never tried touch therapy. Proponents say that is one of the most important aspects of retail massage—an open door for consumers.

Elements’ Merhib says until recently, the massage profession still had an unknown, back room sort of feel to it. “Today, [franchises] are trying to fill a niche for people who wanted massage, but didn’t know where to go. It has opened up peoples’ awareness of what massage is.” Add in the “always available” factor and low cost, and consumers are looking at massage differently.

Franchise owner Forrest Burdue, the first to sign on as an Elements franchisee, has seen the result of giving a community convenient access to massage. “I think there was a stigma attached to getting massage and when people see more studios in their neighborhoods, right next to a store they frequent, it brings validity to the profession,” he says. “Where my studio is located is a very tight community and people are really involved with the schools and churches, so when they hear that friends and neighbors come in to see us and they hear the benefits of getting massage, it brings new clients in the door just by word-of-mouth.”

Creating Jobs—
School Placement

Another crucial role massage franchises play is that of employer. A significant portion of U.S. massage therapy schools are required to secure jobs for a percentage of their new graduates in order to maintain accreditation and Title IV funding. Franchises are able to lend a hand. Funk says early on, schools were graduating students with limited opportunities to place them. She says new graduates, unable to find work, would leave the profession, not necessarily because their bodies broke down, but because the career opportunities were few and far between.

Through a process of shaking hands and knocking on doors, things changed. “We have great relationships with most of the schools in this country,” Funk says of Massage Envy today. The fruits of these relationships are thousands of new jobs.

Even before a recent agreement between Corinthian Colleges (parent company of Everest Colleges) and Massage Envy to partner in the hiring of new massage graduates, Lorine Hill, president of Everest College in Fife, Washington, says her campus had a strong relationship with Massage Envy and Hand and Stone. “Now the issue is not if our students get a job, it’s if they want to get a job,” Hill says.

Teri Zelepuza, director of career services at Everest’s Fife campus, says approximately 20–25 percent of her graduating students are hired at massage franchises. In addition to placing students with chiropractors, spas, massage clinics, and physical therapy clinics, she now counts on a healthy percentage of them finding steady employment at a franchise.

Darlene Campo, a teacher at the National Holistic Institute (NHI) in San Jose, California, says massage franchises are great starter jobs for newly minted MTs. “Massage franchises are great ways to get a lot of bodies under your hands while seeking additional training, building a private practice, preparing for employment in a higher-end spa, or just keeping your skills up while doing something more lucrative as a full-time occupation or raising a family.”

”I Just Want To Do Massage”

For many new massage therapists, starting their own practice is daunting. With massage franchises, MTs say they now have another option. That’s what Shannon Ellis realized when she pursued a career in massage after her divorce.

Having graduated from massage school in February 2009, Ellis started working at a Massage Envy clinic in Charlotte, North Carolina, four months later, and now, working 25–30 hours a week, says she is exactly where she wants to be. As a mother of two, Ellis needs flexibility in her work schedule. She says her employer gives her that, even allowing extended flexibility in the summer when her children are out of school.

Even before she graduated from massage school, Ellis says she knew she didn’t want to hang up her own shingle. “I wanted to be in a place where I didn’t have to keep my own finances.” Ellis says she also needed a stress-free workplace. “I don’t have time to wash the sheets, lug my table around, buy my supplies, lease space, or go out alone. Going back to work after being a stay-at-home mom was scary. I felt physically safer, and business-wise I felt safer [being in this environment].” At 41, Ellis says her role at Massage Envy meets her needs. “It’s good for me right now.”

Funk says many of Massage Envy’s therapists fall into this category. “A lot don’t want to run a business, but like to work in a team environment and have full work schedules,” she says. “This works for someone who is truly into massage and truly a healer; they can come in and just concentrate on the client.”

Erin Murphy, an instructor at Everest College, Fife, says the franchise model is perfect for some therapists. “We have students who prefer being an employee. They just want to show up and get paid.” Murphy says with entry-level opportunities being more available, she foresees less early burnout for therapists, a phenomenon that has forever plagued the massage profession.

Valid Criticisms or Growing Pains?

Critics have hounded the massage franchise world since its inception. Dozens of online message boards give voice to the disgruntled and dissatisfied therapist. But are the criticisms valid or the result of the rapid growth franchisors have undergone?

 

snapshot  of Salaries

One of the most frequent criticisms about working with a franchise business is the low pay. Funk says it’s a fallacy. The national average for Massage Envy therapist salaries is $40,000 (including bonuses and tips), Funk reports, with full time considered 28–30 hours a week. In New York, Northern Virginia, and along the East Coast, therapists can earn $50,000–$60,000 because of the location. The best benefit of all, Funk says, is that the work is steady and stable.

Jervik says Elements’ therapists earn between $18–$25 per massage, not including tips and depending on their location. With that salary comes a career path, he says. “We’re focusing on becoming an employer of choice. We want to be competitive in our wages and we’re working really hard on continuing education programs to give them longevity. We are really focusing on some clear, defined career paths, whether it’s becoming a manager or giving therapists an opportunity to become owners themselves.”

Gina Drohan, a massage therapist and Massage Envy franchise owner in California, says she is frustrated by the salary criticisms franchises endure. “My [three] clinics, for example, get more clients than any other spas in our area,” she says. “Our therapists are busy and make good tips. The per session rate is based on a lower rate we charge clients, but therapists have no cost to business whatsoever and are pretty much guaranteed a full schedule. They also get medical benefits, free massage, paid holidays, free continuing education, etc., that they don’t get at other spas, and certainly not working for themselves. I always say it’s not for everyone,” she says, “but my therapists who do what I train them to do—show up consistently, give their [business] card, ask for repeat business—have paychecks that are twice what others are. It’s what you make it.

“I can tell you that with 500 hours of training, making $25–$41 per 50-minute session, with bonuses and tips, sounds pretty good to me,” Drohan says of her employees’ wages.

good work

Delivering cookie-cutter massage has been another criticism following the franchise community. “I can tell you that there’s 31 flavors of massage where I work,” Ellis says of her employment at Massage Envy. “We have some therapists who love to do deep-tissue work and some who do simply strict Swedish. We customize the massage to whatever is going on in the client’s body.”

It’s obvious that new therapists can make their mark under the franchise model, but franchise work appeals to veteran therapists as well. Funk says while Massage Envy franchises create opportunities for new therapists, approximately 34 percent of their workforce has more than four years in the profession. Jervik says Elements staff must become “certified” through the organization, using virtual training videos and online tests. “It helps us to ensure they get the training that is necessary.” And Marco, from Hand and Stone, says whether he’s hiring therapists for a franchise in a shopping center or the Ritz Carlton, he’s going to the same place for his MTs. “I want people to experience a great massage, wherever they go. It doesn’t help anyone in the industry to get a bad experience. We want them to come back.”

the value of Competition

For those concerned that franchises will take business away from independent therapists, MT veteran Toni Roberts says there’s always been somebody willing to do the job for less. “However, it takes a long time to become an excellent practitioner, and a lot of practice and study. We lose a good many before they reach that point. I think higher-skilled practitioners will remain rare enough to earn higher wages, and it should give new practitioners something to strive for.” Still, she says, she’s concerned that the days of the independent practitioner are numbered. “Although a few will probably survive, I think the days of solo practices may be numbered, which makes me sad ... Those who survive as independents will probably be forced to step up their skills and business practices, which can be a good thing,” she says.

“Independent [practitioners] have their place and will always have their place, but they have to compete,” says Marco, from Hand and Stone. What might have been acceptable sometimes in the past—a portable table, a shabby, not-so-comfortable massage room with a television playing somewhere in the background—no longer holds muster, he says. The franchise has created a new expectation.

Les Sweeney, president of Associated Bodywork & Massage Professionals, says the question should really be not how to compete with these franchise businesses, but how to use them to strengthen your own business. “Whether viewed as the ‘bad guys’ or not, their presence has changed how independent practitioners need to view practice development and pricing,” he says. Hill, from Everest College, doesn’t believe massage franchises are taking clients away. “They’re accessing clients of massage who possibly have never had a massage. They are expanding the power of touch and isn’t that what it’s all about?”

Now that the spa component is being added to the Massage Envy mix, will the spa industry be welcoming of its new competition? “The question raises, I am sure, some concerns from spa owners,” says Hannelore Leavy, executive director of the Day Spa Association. “My view is that competition breeds business.” She says a great example of this is Restaurant Row in Manhattan’s off-Broadway theater district, where more than 20 restaurants took over a run-down city block and transformed it. “Now, they all thrive,” she says.

“I see similarities within the day spa. I have always saluted salons [hair and nails] that added spa services to enhance their offerings to clients. Those are possibly clients who never dreamed of trying spa services.” Once exposed to the value and benefit of these services, clients are more inclined to become regular users of spa treatments. “Those clients who will finally try a massage or a facial at the salon they trust will eventually graduate to visit a ‘real’ day spa and after that, hopefully graduate to make a destination/resort spa their next vacation.” Leavy says Massage Envy and others are no different from the salon offering spa services, as long as the consumer knows this is not a full-service day spa. “It is a simple formula of educating the consumer,” she says.

What Have We Lost?

Despite the obvious changes massage franchises have brought to the profession, critics say there are some less evident things we’ve lost along the way. “I do believe there are two sides to this balance sheet, and like it or not, franchises are here to stay, but one of my biggest concerns with franchising massage is that business people, more than MTs, will have the power to influence the public’s perception of the profession,” says Michael Koplen, DC, a California chiropractor who began as a massage therapist in the 1980s. “It’s the business and franchise owners who create the rules and policies, so they are the people who can primarily shape the public’s perception of massage.” But, he says, they don’t necessarily have a true passion for massage or the quality of client care provided.

After massage school, Koplen says he and his fellow graduates were filled with a strong, passionate purpose. “We had a passion to heal people through massage ... We had a passionate purpose driving us to do that. Franchises, on the other hand, can tear the heart, passion, and quality from massage through assembly line policies and fast-paced standardization of touch.” Without a passionate purpose, Koplen says you likely miss the quality of care that touch can bring. “Combining passion with purpose is very important, especially in healing professions. There’s a different quality between a practitioner giving someone a rub only because they want a paycheck at the end of the day versus one who’s interested in the quality of care and clients’ outcomes.”

Denver-based practitioner Nancy Saunders says she thinks one of the things missing in retail massage is the client-practitioner relationship. “In an [independent] setting such as mine, I pride myself on creating a relationship with clients.” She says understanding her clients’ lifestyles and what’s going on in their lives, helps her see what’s happening in the muscles. “Relationships create a place where healing can happen.” A franchise experience doesn’t allow for that facet of the client-practitioner relationship, and, in fact, dilutes it, she says. “Franchises are a great place for students to go fresh out of school, and we all need a place to get started, learn the business, and hone our skills. I think [franchises] could be a great opportunity for the new therapist, but isn’t it just an extension of a student clinic? What about the client?” she asks.

Koplen says franchises should be a positive wake-up call for private practitioners. “Hopefully franchise growth will catalyze private practitioners to sharpen their skills even more,” he says. “By therapists increasing their professionalism and client management skills, consumers will be able to discern the difference. I sense there are definitely enough clients and a rightful place for both types of massage to exist in a complementary manner. I believe that’s what we’ll see evolve.”

Do Your Research

If you’re seeking employment with a massage franchise, experts agree it’s important to do your homework. Even though their business name may be the same, every franchisee runs his or her company differently, offering different benefits, wages, and work environments.

Jon Brovitz, who owns seven Massage Envy clinics in Arizona with his wife Bonnie, says working at a massage franchise is like any business: the job environment and workplace is entirely dependent on the owners and the management. “You are really working for the owners and not the franchisor,” says Brovitz, who first came to massage as a client. He says he offers his full-time Massage Envy employees a salary between $35,000–$50,000, prefers hiring managers who are also therapists, and tries to keep the work environment supportive, fun, and busy. He admits, however, that not all franchisees set their business up that way.

Beth McNeill, campus manager for NHI, tells her graduates to shop around and schedule several interviews. “I tell them to spend time in the break room to get a feel for the morale.” Do the research and see if this business is the right fit. When evaluating your options, make sure you’re comparing apples to apples. Consider what kind of hours you would be working if you were employed at the day spa in your neighborhood or the resort spa 45 minutes away. What kind of hours would you work if you ran your own office of therapists and managed the books, the sheets, the marketing, the billing/payroll, and, of course, the overhead?

Marco says therapists must buy into the culture of the workplace they have chosen in order to be successful. “If they’re not happy, they should go where they will be happy.”

The Turning Tides

Some industry leaders remember their initial concern when the first franchises opened their doors. “Initially, when I heard about their concepts for introductory pricing levels, membership options, and compensation structure, I was a bit taken aback and felt threatened both as a spa owner and massage therapist,” says spa trainer and consultant Felicia Brown, the Day Spa Association’s 2009 Spa Person of the Year.

But her concerns quickly dissolved after working with franchise owners and therapists. “The employees of the franchises I’ve worked with as a CE provider and consultant seem to be happy overall,” she says. “Yes, some people have complained about the amount of money they make at their jobs, but to be fair, I’ve heard that kind of complaint at lots of spas and massage practices, including my own. The bottom line is that you can have good or bad apples in a barrel, whether the business structure is a franchise, big corporation, or mom-and-pop.”

Ultimately, Brown says retail massage has helped the profession. “It has fostered competition, creativity, and new ways of doing business. It has brought massage therapy to a whole new group of people, increasing the pool of potential clients for all of us. It has sold much of the massage-buying public on the concept of getting regular monthly massages, rather than just as a special occasion purchase.” Finally, she says, it has created an entry-level workplace for therapists coming straight out of school that allows them to focus on doing massage rather than opening a practice. 

From her Massage Envy perspective, Funk sizes up the franchise world neatly: “We are targeted to perform 8.3 million massages this year, currently we have almost 700,000 members, and first-time massage recipients find their way to our clinics at a tune of around 30,000 people per month. That is a lot of healing touch going on. And wasn’t that the goal in our profession?”

 

Karrie Osborn is contributing editor for Massage & Bodywork magazine. Contact her at karrie@abmp.com.

 



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