12 May 2014
Liz Terry: Franchises are reshaping the spa market
BY Helen Andrews
The increasing number of massage franchise businesses in the US are drawing new types of consumers to the spa industry and accelerating the sector’s growth, according to Spa Business editor Liz Terry.
One example of rapidly expanding franchise businesses is market leader Massage Envy which reached the US$1bn (€726m, £592m) turnover mark last year and will have more than 1,000 spas by the end of 2014.
New entrants in the US such as Massage Green Spa, Hand and Stone and Massage Luxe are also growing quickly.
Writing in the Q2 edition of Spa Business, Terry highlights the need for an estimation of the value or volume of crossover business – people who are introduced to the spa industry via a franchise and go on to become customers of full-service spas and vice versa.
Terry compares spa franchise businesses to her experiences in the health and fitness sector. “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,” she says.
Spa franchise customers – like those belonging to health clubs – are prepared to travel 20-30 minutes for a treatment, while the pricing models similar to those deployed by volume health club operators, she adds.
However the main question, Terry concludes, is whether spa franchises can be sustained without impacting full-service spas.
“In the health club industry, where budget offers have proliferated, they’re starting to bed down to co-exist in a sustainable way with the high end operations, but have knocked the stuffing out of the mid-market,” says Terry.
"Spa operators must also take into account the impact franchises are having on the wider spa market such as the need for effective quality control, market fatigue and employing enough well-trained staff to meet demand."
To read the latest edition of Spa Business, click here.
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