In part 2 of our franchise series, Jane Kitchen moves away from the US and takes a look at
some of the biggest franchises across the rest of the world – from France, to China to Australia
By Jane Kitchen | Published in Spa Business 2016 issue 2
Spa franchises are growing leaps and bounds, offering time-starved consumers quick, focused options in convenient locations – and often at attractive prices. While the majority of spa franchise models have found success in the US (see SB16/1 p82), they’re quickly gaining traction worldwide, with niche opportunities opening up across the globe.
Dragonfly China Founded 12 years ago in Shanghai by Hong Kong-born celebrity hairstylist Georgie Yam (see SB09/4 p20) and local Chinese business partner Eve Zhou, Dragonfly has 15 retreats, three of which are franchises.
The team later brought in Canadian business partner Randal Eastman and a fourth business partner, Grace Zhou. Yam has since passed the reins of operations to the other partners.
Eastman says the Dragonfly model is built around relaxation services that are appealing to both men and women. “It’s a lifestyle concept that is more accessible to a wider audience than a typical beauty-oriented day spa,” he explains.
Projected initial investment for a new spa in China – including construction, fit-out, decoration, supplies, print materials, staff training and franchise fees – is around CNY2m, (US$306,200, €277,820, £219,590).
“China is a different market,” says Eastman. “It’s full of spa offerings and very fragmented, but many franchise or chain operations have closed or are struggling in recent times. I predict more chains growing in China as there is increasing consolidation in this sector.”
Eastman says Dragonfly is focused on expanding its business in China. It’s added traditional therapies such as Chinese massage, moxibustion and scraping to appeal to locals rather than catering just to its core customer base of expatriates.
Dragonfly has 15 retreats, three of which are franchises
Chinese massage is a newly-added service
"I predict more chains growing in China as there is increasing consolidation in this sector" - Randal Eastman
One to watch Sense of Touch - Hong Kong With six locations, two of which are franchises, Hong Kong-based Sense of Touch has not focused on franchises so far, but CEO Neil Orvay says that’s likely to change – he has plans to open at least 20 more spas and is talking with a master franchisee in Vietnam.
Initial franchise payment is approximately US$50,000 (€45,370, £35,860), with ongoing payments of 5 per cent of turnover plus a 2 per cent marketing contribution. Franchisees receive support in marketing, training, menu development, sourcing staff, inventory and ordering and spa management system updates.
Sense of Touch’s main product partner is British brand Elemis and the franchises offer this along with Dermalogica.
There are six day spas already and plans for at least 20 more
There are six day spas already and plans for at least 20 more
So far all spas are in Hong Kong, but Orvay is talking to a master franchisor in Vietnam
CEO Neil Orvay
Endota Australia Based in Melbourne, and started by high school friends Melanie Gleeson and Belinda Fraser in 2000, Endota has 90 day spa franchises in Australia. Fraser left the company in mid 2015 and new partners have since come on board.
With a predominantly female audience, the spa franchise recognises that women often put the needs of others before their own and encourages them to ‘be your best me’. The spas feature a signature, calming scent, as well as originally-composed music and its own-branded skincare line. Other suppliers include Dermalogica and HydroPeptide.
Costs of fitting out a spa are between AU$350,000 (US$251,290, €228,000, £180,210) and AU$450,000 (US$323,090, €293,140, £231,700). Franchisees attend Endota Spa introduction and education courses and the company also provides four days of in-spa training before opening. Endota Spa training schools also offer refresher courses for product education and retail sales.
Melanie Gleeson started the chain in 2000. Today it employs more than 1,000 people
Endota has 90 day spas across Australia
Body’minute France Based in Paris, Body’minute got its start back in 1998 and has grown to include 400 beauty centres across Europe – mostly in France. The company also has one location in Miami, USA and wants to launch in the UK, Italy, Spain, Belgium and Luxembourg.
These membership-based, female-only beauty salons offer waxing, facials, body treatments, relaxation and manicures – all without an appointment.
Body’minute has positioned itself as a low-price player, but had a turnover of around €100m (US$110.2m, £79m) in 2012. Membership is €9.90 (US$11, £8) per month with facial and body treatments ranging from €9.90 to €48 (US$50, £36).
Cost of a Body’minute franchise starts at €130,000 (US$143,280, £102,760) and there’s a fixed monthly fee per treatment room. Average day spa turnover is reported at €250,000 (US$275,540, £197,610) after two years.
It makes its own products and also has a training school in Paris. IT, managerial and marketing training is provided as well as an annual seminar and regional round tables.
One to watch The Massage Company - UK The Massage Company debuted in the UK in April 2016, with its first 14-treatment room flagship location in Surrey, England.
This is a new venture from Charlie Thompson – former head of health and beauty for UK’s Virgin Active, and Elliot Walker – former managing director of Murad UK. It will offer a membership package with monthly massages at £44.95 (US$63, €57).
“We’re building massage as a routine part of lifestyle,” says Thompson. “We’re changing the way that people view it in the UK and bringing it into the mainstream.”
The first UK franchise opened in April and the plan is to create a national chain
The first UK franchise opened in April and the plan is to create a national chain
We’re building massage as a routine part of lifestyle - charlie thompson
One to watch LivNordic - Sweden Not a franchise per se, LivNordic is a spa concept available for licensing from Swedish-based spa consultancy Raison d’Etre, it launched in April 2015 on Viking Star Cruises (see SB15/3 p32) and focuses on holistic wellbeing, drawing inspiration from Nordic culture and inspired by nature.
The first land-based LivNordic Spa & Wellness opened in January in the Cayan Tower in Dubai, and this April, a second LivNordic is due to open on-board Viking Sea. The licensing opportunity is mainly geared towards hotels, where the spa is a standalone brand, yet integrated into overall operations. The business model is a management and joint venture partnership between Raison d’Etre and the hotel owner.
The plan over the next five years is to have at least 15 LivNordic Spas open, says Anna-Cari Gund, managing director of Raison d’Etre.
“We see a great demand for our Nordic lifestyle concept, where wellness is incorporated in everyday life,” says Gund. “People all over the world are longing for a closer connection to nature.”
The Nordic spa concept launched on the Viking Star cruise ship last year and has a focus on bathing rituals with a modern Scandinavian design
The Nordic spa concept launched on the Viking Star cruise ship last year and has a focus on bathing rituals with a modern Scandinavian design
l The Nordic spa concept launched on the Viking Star cruise ship last year and has a focus on bathing rituals with a modern Scandinavian design
"We see a great demand for our nordic lifestyle concept" - Anna-Cari Gund
Four Fountains India Launched in 2007 in the tech-hub city of Pune, India, Four Fountains now has 30 franchisees in three cities across the country.
With backing from private equity firm Fulcrum Ventures, the chain was set up by Anurag Kedia, Saurabh Garg and Sunil Rao, three business school graduates working as sales and consulting managers who were frustrated by their inability to afford luxury spas.
The team created Four Fountains in an effort to put the health benefits of spa therapies within reach of more people and their ambitious target is to have 300 spas in 10 major Indian cities over the next few years, says Four Fountains company director Kedia.
“Spa franchises continue to grow,” he explains. “In India, the market is just opening up – the penetration rate for spas and massages is in the low-single-digits, and hence there’s a long way to go from here when it comes to growth.”
Currently every Four Fountains spa has a turnover of close to INR10m (US$146,000, €132,470, £104,710) annually.
Total cost of setting up a spa with Four Fountains is around INR6m (US$87,600, €79,480, £62,820), which includes cost for interiors, furniture, fixtures, security deposit and working capital. Four Fountains doesn’t have an up-front franchise fee, but instead, charges a royalty on the total revenue franchisees generate.
"In India, the market is just opening up – the penetration rate for spas and massage is in the low-single-digits" - Anurag Kedia
In part 2 of our franchise series, Jane Kitchen moves away from the US and takes a look at
some of the biggest franchises across the rest of the world – from France, to China to Australia
Jane Kitchen, Spa Business
Spa franchises are growing leaps and bounds, offering time-starved consumers quick, focused options in convenient locations – and often at attractive prices. While the majority of spa franchise models have found success in the US (see SB16/1 p82), they’re quickly gaining traction worldwide, with niche opportunities opening up across the globe.
Dragonfly China Founded 12 years ago in Shanghai by Hong Kong-born celebrity hairstylist Georgie Yam (see SB09/4 p20) and local Chinese business partner Eve Zhou, Dragonfly has 15 retreats, three of which are franchises.
The team later brought in Canadian business partner Randal Eastman and a fourth business partner, Grace Zhou. Yam has since passed the reins of operations to the other partners.
Eastman says the Dragonfly model is built around relaxation services that are appealing to both men and women. “It’s a lifestyle concept that is more accessible to a wider audience than a typical beauty-oriented day spa,” he explains.
Projected initial investment for a new spa in China – including construction, fit-out, decoration, supplies, print materials, staff training and franchise fees – is around CNY2m, (US$306,200, €277,820, £219,590).
“China is a different market,” says Eastman. “It’s full of spa offerings and very fragmented, but many franchise or chain operations have closed or are struggling in recent times. I predict more chains growing in China as there is increasing consolidation in this sector.”
Eastman says Dragonfly is focused on expanding its business in China. It’s added traditional therapies such as Chinese massage, moxibustion and scraping to appeal to locals rather than catering just to its core customer base of expatriates.
Dragonfly has 15 retreats, three of which are franchises
Chinese massage is a newly-added service
"I predict more chains growing in China as there is increasing consolidation in this sector" - Randal Eastman
One to watch Sense of Touch - Hong Kong With six locations, two of which are franchises, Hong Kong-based Sense of Touch has not focused on franchises so far, but CEO Neil Orvay says that’s likely to change – he has plans to open at least 20 more spas and is talking with a master franchisee in Vietnam.
Initial franchise payment is approximately US$50,000 (€45,370, £35,860), with ongoing payments of 5 per cent of turnover plus a 2 per cent marketing contribution. Franchisees receive support in marketing, training, menu development, sourcing staff, inventory and ordering and spa management system updates.
Sense of Touch’s main product partner is British brand Elemis and the franchises offer this along with Dermalogica.
There are six day spas already and plans for at least 20 more
There are six day spas already and plans for at least 20 more
So far all spas are in Hong Kong, but Orvay is talking to a master franchisor in Vietnam
CEO Neil Orvay
Endota Australia Based in Melbourne, and started by high school friends Melanie Gleeson and Belinda Fraser in 2000, Endota has 90 day spa franchises in Australia. Fraser left the company in mid 2015 and new partners have since come on board.
With a predominantly female audience, the spa franchise recognises that women often put the needs of others before their own and encourages them to ‘be your best me’. The spas feature a signature, calming scent, as well as originally-composed music and its own-branded skincare line. Other suppliers include Dermalogica and HydroPeptide.
Costs of fitting out a spa are between AU$350,000 (US$251,290, €228,000, £180,210) and AU$450,000 (US$323,090, €293,140, £231,700). Franchisees attend Endota Spa introduction and education courses and the company also provides four days of in-spa training before opening. Endota Spa training schools also offer refresher courses for product education and retail sales.
Melanie Gleeson started the chain in 2000. Today it employs more than 1,000 people
Endota has 90 day spas across Australia
Body’minute France Based in Paris, Body’minute got its start back in 1998 and has grown to include 400 beauty centres across Europe – mostly in France. The company also has one location in Miami, USA and wants to launch in the UK, Italy, Spain, Belgium and Luxembourg.
These membership-based, female-only beauty salons offer waxing, facials, body treatments, relaxation and manicures – all without an appointment.
Body’minute has positioned itself as a low-price player, but had a turnover of around €100m (US$110.2m, £79m) in 2012. Membership is €9.90 (US$11, £8) per month with facial and body treatments ranging from €9.90 to €48 (US$50, £36).
Cost of a Body’minute franchise starts at €130,000 (US$143,280, £102,760) and there’s a fixed monthly fee per treatment room. Average day spa turnover is reported at €250,000 (US$275,540, £197,610) after two years.
It makes its own products and also has a training school in Paris. IT, managerial and marketing training is provided as well as an annual seminar and regional round tables.
One to watch The Massage Company - UK The Massage Company debuted in the UK in April 2016, with its first 14-treatment room flagship location in Surrey, England.
This is a new venture from Charlie Thompson – former head of health and beauty for UK’s Virgin Active, and Elliot Walker – former managing director of Murad UK. It will offer a membership package with monthly massages at £44.95 (US$63, €57).
“We’re building massage as a routine part of lifestyle,” says Thompson. “We’re changing the way that people view it in the UK and bringing it into the mainstream.”
The first UK franchise opened in April and the plan is to create a national chain
The first UK franchise opened in April and the plan is to create a national chain
We’re building massage as a routine part of lifestyle - charlie thompson
One to watch LivNordic - Sweden Not a franchise per se, LivNordic is a spa concept available for licensing from Swedish-based spa consultancy Raison d’Etre, it launched in April 2015 on Viking Star Cruises (see SB15/3 p32) and focuses on holistic wellbeing, drawing inspiration from Nordic culture and inspired by nature.
The first land-based LivNordic Spa & Wellness opened in January in the Cayan Tower in Dubai, and this April, a second LivNordic is due to open on-board Viking Sea. The licensing opportunity is mainly geared towards hotels, where the spa is a standalone brand, yet integrated into overall operations. The business model is a management and joint venture partnership between Raison d’Etre and the hotel owner.
The plan over the next five years is to have at least 15 LivNordic Spas open, says Anna-Cari Gund, managing director of Raison d’Etre.
“We see a great demand for our Nordic lifestyle concept, where wellness is incorporated in everyday life,” says Gund. “People all over the world are longing for a closer connection to nature.”
The Nordic spa concept launched on the Viking Star cruise ship last year and has a focus on bathing rituals with a modern Scandinavian design
The Nordic spa concept launched on the Viking Star cruise ship last year and has a focus on bathing rituals with a modern Scandinavian design
l The Nordic spa concept launched on the Viking Star cruise ship last year and has a focus on bathing rituals with a modern Scandinavian design
"We see a great demand for our nordic lifestyle concept" - Anna-Cari Gund
Four Fountains India Launched in 2007 in the tech-hub city of Pune, India, Four Fountains now has 30 franchisees in three cities across the country.
With backing from private equity firm Fulcrum Ventures, the chain was set up by Anurag Kedia, Saurabh Garg and Sunil Rao, three business school graduates working as sales and consulting managers who were frustrated by their inability to afford luxury spas.
The team created Four Fountains in an effort to put the health benefits of spa therapies within reach of more people and their ambitious target is to have 300 spas in 10 major Indian cities over the next few years, says Four Fountains company director Kedia.
“Spa franchises continue to grow,” he explains. “In India, the market is just opening up – the penetration rate for spas and massages is in the low-single-digits, and hence there’s a long way to go from here when it comes to growth.”
Currently every Four Fountains spa has a turnover of close to INR10m (US$146,000, €132,470, £104,710) annually.
Total cost of setting up a spa with Four Fountains is around INR6m (US$87,600, €79,480, £62,820), which includes cost for interiors, furniture, fixtures, security deposit and working capital. Four Fountains doesn’t have an up-front franchise fee, but instead, charges a royalty on the total revenue franchisees generate.
"In India, the market is just opening up – the penetration rate for spas and massage is in the low-single-digits" - Anurag Kedia
