The NOW Massage Franchises: High Revenue, Low Profits

Among all massage franchises, The NOW Massage is an alternative you should seriously consider as a franchisee. First, its growth: since it started franchising in 2019, The NOW Massage has expanded to 45 locations globally (of which 41 in the US).

Also, The NOW Massage is a great investment if you look more closely. Even though it has relatively low profit margins, its investment cost ($591,000) is so low compared to profits it ends being a great franchise investment.

How much profits can you really make with a The NOW Massage franchise? How profitable is this business? Is this worth investing the $591,000 upfront? For these questions and more, read this article. Let’s dive in!

Key stats

Franchise fee	$60,000
Royalty fee	6.0%
Marketing fee	2.0%
Investment (mid-point)	$648,000
Revenue per unit	$1,617,000
Revenue per sq. ft.	$719
Sales to investment ratio	2.5x
Payback period*	3 years
Minimum net worth	$750,000
Minimum liquid capital	$200,000

What is The NOW Massage?

The NOW Massage is an American massage concept franchise headquartered in Los Angeles, California.

Gara Post founded the chain in 2015 on the premise that self-care is a necessity, not a luxury. Its franchises offer massage therapy, spa services and personal care products.

Its franchising journey began in 2019 and as of today, it has 45 locations worldwide of which 41 in the US.

The NOW Massage franchises pros and cons

The Pros:

• Site selection and construction: The franchisor has a qualified real estate team to help its franchisees with site selection and identify the right salon location regarding market demographics. It also helps them in designing, construction and lease negotiations to get the best real estate terms.
• Pre-opening training: The NOW Massage provides its franchisees with in-depth training and support in establishing their boutiques. Franchisees are trained on the best salon practices, products and services, how to handle customers and how to carry out a successful grand opening.
• HR assistance: The NOW Massage provides its franchisees with direct assistance in recruiting qualified staff and team building.These include a personalized applicant tracking system and work with partners like the International Spa Association (iSPA) and the American Massage Therapy Association (AMTA).
• Sales and operations: The brand employs an operational team to help its franchisees with sales guidance and training. It assists franchisees from the start to ensure that they drive membership sales, meet key metrics and grow their salons.
• Marketing and public relations: The franchisor has a dedicated marketing and branding team to help franchisees attract customers. It helps them with their public relations, digital advertising, social media, influencer & ambassador engagement, content development, email marketing and website optimizations.
• Exclusive territory protection: The franchisor allows franchisees the right to operate in a protected development market. It does not authorize other franchises or competing channels to operate in the protected area.
• Third-party financing: The brand has relationships with third-party lenders to offer its franchisees financing for the franchise fee, startup costs, equipment, inventory and payroll.
• Multiple revenue streams: The brand has designed different options and enhancements to offer a great customer experience and boost their profitability. It offers three signature Swedish-inspired massages: The Now, The Healer and The Stretch, in addition to a branded product line of self-care products, jewelry as well as the opportunity to sell gift cards and memberships.

The cons:

• Not a part-time business: The NOW Massage cannot be run on a part-time or side-hustle basis. Franchisees must follow the franchisor’s set working hours.
• Not a passive investment: The franchise does not allow for absentee ownership. Franchisees are required to participate in the day-to-day operations of their boutiques actively.
• Not a home-based business: The franchise cannot be operated from a mobile unit or vehicle. Franchisees are required to have an office space, retail facility, or warehouse to operate from.
• Competition from other leading massage franchises such as Massage Envy and Hand & Stone Massage o

How much does a The NOW Massage franchise cost?

You would need to invest around $648,000 to open a The NOW Massage franchise on average. This amount is on the higher end compared to other salon franchises ($450,000).

Note that the investment you would have to fund as the franchisee depends on factors like the salon’s location, size, etc. The amount presented above is an average according to the latest Franchise Disclosure Document. The FDD states that the investment ranges between $477,000 and $819,000.

The NOW Massage franchise startup costs

The investment covers all the startup costs you may need to start a massage therapy boutique. You must need to pay an to the franchisor.

In addition to the initial franchise fee of $60,000 which you must pay to the franchisor, the investment also covers:

• Formation Costs: travel fee for corporate training, leasehold improvements, equipment, furniture, permits, business licenses, professional fees, etc.
• Initial Marketing: initial marketing kit, opening launch, pre-opening sales expenses, digital marketing expenses for first 3 months
• Operating Costs: insurance, utility deposits, 3 month’s rent, working capital for the first 3 months, etc.

Type of Expenditure	Low	High
Initial Franchise Fee	$60,000	$60,000
Formation Costs	$367,209	$621,609
Initial Marketing	$24,500	$34,500
Operating Costs	$25,750	$103,000
Total	$477,459	$819,109

How much revenues does a The NOW Massage salon make?

On average, The NOW Massage franchises generate about $1,617,000 in revenue per year.

How profitable is a The NOW Massage franchise?

We estimate the average The NOW Massage franchise makes $256,000 in profits per year. That’s a 11% EBITDA margin.

Luckily, The NOW Massage discloses detailed cost information in its Franchise Disclosure Document. Actually they do provide a detailed profit-and-loss from their affiliated boutiques (see above) which they adjusted for royalties, as if they were franchised-owned.

Yet to estimate EBITDA we used the 2019 revenue number ($2,327,000) in order to give a better picture of what profits would be post pandemic, as explained in the section on revenue earlier.

Profit and loss	Amount	% revenue	Source
Revenue	$2,327,000	100%	as per FDD
COGS*	$(1,047,150)	45%	as per FDD
Gift card redemption	$(186,160)	8%	as per FDD
Other operating costs	$(581,750)	25%	as per FDD
Royalties	$(139,620)	6%	as per FDD
Marketing	$(116,350)	5%	as per FDD
EBITDA	$255,970	11%	as per FDD

Is The NOW Massage a good franchise investment?

So should you invest in a The NOW Massage franchised salon today? Are the profits worth the initial investment of $591,000?

The answer is actually simple: if we use the pre pandemic numbers (2019) for revenue, it’s a no brainer: The NOW Massage is an incredibly profitable franchise investment.

Indeed, even if we assume a 5% net profit margin (which makes sense given EBITDA is 11%), we found that the franchise has an average payback of 5 years. 5 years payback is excellent for a salon franchise, indeed the average payback for a salon franchise is around 8 years in comparison.

Yet, you must be very careful here: by using 2019 numbers we assume The NOW Massage are back to their revenue and profits performance as they were pre pandemic. If we were to use 2020 or 2021 numbers instead the picture would be very different instead.

How does it compare vs. other franchises?

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