Health and fitness franchises are a growing market with huge potential. In fact, out of the 22,054 health and wellness spas in the United States, there were over 187 million visits per year, according to Statista and IBIS World. No wonder wellness spa franchises are a hot commodity for business owners. These low cost franchises can be started with as little as $50,000, with minimal overhead and a growing customer base. But what other costs do you need to consider before opening a spa franchise? We’ll explore that and how to start your own spa below.
How Much Is the Startup Cost for a Spa Franchise?
The massage and spa franchise cost varies depending on which franchise you choose and the location you’ll be running your business. No two franchises are alike—even in the same industry. You’ll find a wide range of minimum financial requirements, total investments, and franchise fees as you explore your options. This is in part because of different stipulations franchises have with startup costs like licensing and permits.
You’ll also need consider the expenses of hiring staff, as well as training and marketing materials—among other things. So what does that mean for future business owners and what are examples of spa startup costs?
When considering opening a new franchise, the franchisors want to know that you have enough liquid assets and net worth to cover the cost of starting and maintaining your business. With many franchises there is a minimum cash amount required and, without meeting that criteria, you will not be able to purchase a franchise. These money requirements differ for every spa franchise and might determine which business you will be able to start.
Not only should you meet the minimum financial requirements, but you need to bear in mind that the total investment will be larger than these numbers. That’s because, while you’ll need an initial startup fund, the investment will likely grow once you begin constructing your building, hiring and training employees, and buying equipment. Keep in mind that operating costs like repairs, rent, and utilities will impact your total investment over the years.
You’ll also need to know what the franchise fee and continuing royalties cost, as these will be some of the first transactions you have with a franchisor. Franchise fees do not include expenses other than licensing the franchisor’s name, marketing, and other materials. If the franchise fee is $55,000, you’ll still need to meet the minimum cash requirement—even if you have $55,000 in liquid assets. This fee is different for every franchise and you should do your research before committing.
Starting massage franchises like Elements Massage, for example, requires a minimum of $100,000 in liquid assets, and typical startup costs range from $312,655 to $560,736—with a military or veteran promotion available. Other spa opportunities include Glow Sauna Studios, which also has a minimum cash requirement of $100,000, with typical startup costs ranging from $222,675 – $381,410. Frequently, franchisees make up for the remainder of their costs by taking out a business loan or line of credit.
Overall, you should expect to invest a significant amount of money into a spa franchise. To help find health and fitness franchises that meet your investment level and location requirements, FranchiseOpportunities.com has an easy-to-use database of available franchises in the industry.
How to Start a Spa Business Franchise: What Steps Should You Take?
The essential steps you need to follow to start a spa franchise are similar to other types of franchises: submit an application, complete legal documentation, create a business plan, and set up shop. However, before you take these steps, you need to make sure you’re prepared.
The first stage is to start researching which franchises will best fit your business needs. Answer questions like:
- Do I have experience in the industry? Is that required for x or y franchise?
- Will I feel fulfilled by and excited about this business opportunity?
- Is my local market in need of this type of franchise?
- How does this franchise operate?
While there are several more questions you can ask yourself while researching, what’s most important is to know what franchise will work best for you.
The second thing you should do is establish an S-corporation or LLC. This step is important for two reasons: to set up taxes for your business and to remove personal liability—which means your assets are at risk. Creating a corporation is valuable, because a legal entity has the ability to form contracts, take on debt, as well as file and defend lawsuits. It also has all of the legal rights of an individual, including getting loans, opening bank accounts, buying property, and signing leases. Ultimately, the reason you’re establishing a legal entity like an LLC is to protect yourself and your assets.
Once you’ve completed all of your research and registered your business, you’ll be ready to submit an application to the franchisor. They’ll ask you for your current finances—including net worth and liquid capital. As far as funding is concerned, many times franchisees apply for business loans or lines of credit to get the process started. They’ll also want you to include your personal information—like education and employment history. And finally, they’ll want to know your preferred location so they can analyze the market.
The application will be followed up by discussing the franchise agreement and other legal documents. These are best to go over with your legal counsel before signing any documents. Other documentation you need to consider is creating a business plan. If you’re wondering, “how do I make a business plan for a spa franchise,” it contains details about business projections and operations—like an overall executive summary. Once you’ve completed everything, you’ll be ready to set up your business and begin operating!
Is Owning a Spa Profitable?
Yes, owning a spa franchise is absolutely profitable. According to Statisa, projections anticipate the value of the spa industry worldwide to reach $185 billion by 2030, up from an estimated $95 billion in 2021. Not only that, but the health and wellness spa industry had employed nearly 352 thousand people in 2022. It is clearly a booming industry that is seeing growing profitability forecasted for the next several years.
Spa Day Just Got a Little Bit Sweeter
If you’d like to be a part of this flourishing industry, FranchiseOpportunities.com has many health and fitness franchises available for you. Using our advanced search features, you’ll be able to find a franchise in your budget and location without the need for tedious research. With our spa offerings, you’ll enjoy proven business procedures and a dedicated customer base, all while helping people feel refreshed and rejuvenated. Visit our website today to learn more about how FranchiseOpportunities.com can help you start the business of your dreams!