Franchising experts say franchised day spas well positioned for growth

An Automated day spa service from Planet Beach Contempo Spa

Entrepreneur Magazine this month wrote about how franchised day spas are well positioned for growth this decade and talked to Stephen Smith, the CEO and founder of Planet Beach Contempo Spas, the largest franchised day spa.

Here’s an excerpt:

Duck into any downtown day spa or destination resort and the Enya might seem to echo a little more loudly than usual. That’s because, according to the International Spa Association, America’s appetite for blueberry pore-refining facials, seaweed body wraps, reflexology and hot stone massages has been a casualty of the recession. After a decade of unprecedented growth, and a couple of stellar years–spa visits jumped by nearly 16 percent in 2008 alone–the industry was hit hard, losing 10 percent of its business in 2009 and 5 million square feet of real estate between mid 2009 and 2010. “We’re the industry that’s first to feel a recession and the last to recover,” says Hannelore Leavy, chairwoman of the Day Spa Association advisory board. “Spa services are still a luxury and not absolutely necessary. People tend to hold back.”

Entreprenuer Magazine 2011 Trends Issue

But a closer look shows that Americans haven’t quite suppressed their penchant for pampering. While destination and upscale day spas have taken a brutal waxing, the relatively new franchised massage and day-spa sector has been busy keeping the nation rubbed down and exfoliated. Franchised spas, which include more than a dozen concepts, with more being launched each month, have refined their business model over the last few years and picked up a huge base of cost-conscious consumers. Most companies are reporting double-digit growth in sales, huge increases in new franchises and big upticks in repeat visits. Most of the franchise concepts have positioned themselves for exponential growth when credit markets finally loosen up.

“Planet Beach was one of the largest tanning franchises in the country, but noticing the increasing drumbeat against UV tanning five years ago, the 300-plus-location concept began slowly converting its tanning operations into fully automated Contempo Spas. For a $99 monthly membership fee, Planet Beach clients have unlimited use of services such as a Mystic Tan spray tan booth and a gallery of futuristic gadgets like a hydromassage bed, luminous facial machine, teeth-whitening light and a sauna capsule. Now two-thirds of their units are fully automated.

“Steve Smith, CEO and founder of Planet Beach, says his Marrero, La., company has found a sweet spot. ‘A little over a year ago, a Massage Envy (another franchise) moved in right next to the store I own,’ he says. ‘Our concepts are so different, it was like they never moved in. The price we charge for complete access is cheap compared to even lower-priced franchises like Massage Envy, and way less than traditional day spas.’

“Indeed, when his first 20 stores changed over to the Contempo Spa model, quarterly revenues jumped 47 percent.”

“Franchised spas,” the article notes, “have refined their business model over the last few years and picked up a huge base of cost-conscious consumers. Most companies are reporting double-digit growth in sales, huge increases in new franchises and big upticks in repeat visits” at a time when destination and upscale day spas are suffering.

Entrepreneur cited a September study sponsored by the National Institutes of Health that found that even a single massage can lower stress hormones, boost to immune system and increase levels of a hormone associated with contentment.

“Spa culture has seeped into mainstream America in the past 20 years,” the magazine said. “What was almost a taboo service, massage today is considered a routine part of sports and wellness.”

The Entrepreneur article concluded with good news for Planet Beach. “Whatever companies come out on top, it’s likely that the low-cost spa and franchise model in general is going to be a long-term winner,” the magazine said.

To read the full article, which includes views from industry experts about the bright future of franchised day spas, click here. [http://www.entrepreneur.com/article/217514]

To learn more about opening an automated Contempo Day Spa, visit, www.myplanetbeachfranchise.com

(Source: myplanetbeachfranchise.coim)