Woodhouse Spa Franchises: Revenues, Costs & Profits (2023)

Like most modern spa franchises, Woodhouse Spa has consistently added new locations over time and today has 76 spas in the US, of which 74 are franchised-owned.

It’s not surprising: in addition to an ever-growing market demand for massage and spa services, Woodhouse Spa can also be a very profitable franchise.

Indeed, despite a high price tag ($1,750,000 investment cost) one Woodhouse Spa makes over $2 million in revenue on average. That explains the 8-9 years payback which is in line with salon franchises as per our benchmark.

How much does it really cost to open a new Woodhouse Spa franchise? How much profits can you make as a franchisee? Should you invest in a Woodhouse Spa franchise? Let’s find out!

Key stats

Franchise fee	$55,000
Royalty fee	6.0%
Marketing fee	3.6%
Investment (mid-point)	$1,750,000
Revenue per unit	$2,023,000
Revenue per sq. ft.	$385
Sales to investment ratio	1.2x
Payback period*	8-9 years
Minimum net worth	$1,000,000
Minimum liquid capital	$250,000

What is Woodhouse Spa?

Woodhouse Spa is a premier day spa franchise headquartered in Lakewood, Colorado. 

It was founded in 2001 by Jeni Garrett and offers a variety of spa treatments, including massage therapy, full body treatments, facial rejuvenation, sleep therapies, waxing, manicure and pedicure services. 

The spa franchise also provides retail lines of home spa programs plus bath and skincare products. 

Woodhouse Spa started franchising in 2003 and is owned and managed by Radiance Holdings. Today, the day spa franchise operates over 76 studios, all franchised across 21 US states. 

Woodhouse Spa: pros and cons

Pros

• Diverse income streams: multiple income sources, including spa treatments, premium retail products and gift cards. 
• Comprehensive franchise support: franchisees are supported by a dedicated team of professionals, from signing the franchise agreement to the grand opening. The franchisor constantly researches new technology, products and treatments to help franchisees stay ahead of the competition. 
• Customised services: franchisees offer personalized services depending on the client’s needs. The franchisor’s signature services, such as Minkyti Facial, Hand Retreat manicure, Seaweed Leaf pedicure and Four-Handed Massage, aren’t available anywhere else. 
• Financial support: Woodhouse Spa has relations with third-party financial sources to help franchisees cover the startup costs, franchise fees, equipment, inventory, payroll and accounts receivable. 
• Exclusive territory protection: franchisees operate within fixed locations without competition from other Woodhouse Spa studios. 

Cons

• No absentee ownership: franchisees must be involved in the day-to-day studio operations. 
• Can’t run part-time: Woodhouse Franchise is neither a part-time investment opportunity nor a side hustle. 
• Minimum employee requirement: 30 employees are required to operate an active Woodhouse Spa studio.
• Can’t operate from home/as a mobile unit: the business cannot be run from home and the franchisees must operate from a retail facility, warehouse, or office space. 
• Competition: from other massage and spa franchises such as Massage Envy, Massage Heights, The Now Massage, Restore Hyper Wellness or Elements Massage to name a few

How much a Woodhouse Spa franchise cost?

You have to invest around $1,750,100 to open a franchised Woodhouse Spa.

This is an average: indeed, it varies based on many factors such as the location of your franchised business, its size, and other factors. 

In addition to the initial franchise fee of $55,000, which you must pay to the franchisor, you would also pay for the leasehold improvements, furniture and fixtures, signage, professional fees, insurance, etc.

Startup costs

Here’s the full breakdown of costs:

Type of Expenditure	Amount
Initial franchise fee	$55,000
Leasehold improvements	$700,000 – $945,000
Business licenses, permits etc.	$250 – $1,000
Signage	$7,500 – $15,000
Insurance – 3 months	$1,500 – $4,000
Additional Funds- 3 months	$15,000 – $40,000
Other	$659,550 – $1,001,400
Total	$1,438,800 – $2,061,400

How much revenue does a Woodhouse Spa franchise make?

A Woodhouse Spa franchise makes $2,023,479 in revenue per year on average, or $385 in revenue per square foot.

Over 2019 – 21 the revenue per franchise has trended upward from $1,693,000 in 2019 to $2,023,000 in 2021. This is a significant increase vs. 2020 (+63%, $1,245,764) as the chain recovered from COVID-19.

How much profits does a Woodhouse Spa make?

On average, a Woodhouse Spa franchise makes $323,000 in profits per year. This corresponds to a 16% EBITDA margin.

Woodhouse Spa is a profitable franchise, yet a 16% EBITDA margin isn’t the best profit margin across the industry. Indeed, we found that spa franchises have an EBITDA margin of around 25% on average.

We calculated this number using the information available in the Franchise Disclosure Document 2022. Fortunately, Woodhouse Spa provides detailed information on the cost structure of its company-owned spas which we are including below:

Profit and loss	Amount	% revenue	Source
Revenue	$2,023,479	100%	as per FDD
COGS	$(706,194)	35%	as per FDD
Labor	$(341,968)	17%	as per FDD
Royalties	$(121,409)	6%	as per FDD
Rent	$(263,052)	13%	as per FDD
Marketing fees	$(73,351)	4%	as per FDD
Other operating costs*	$(194,254)	10%	as per FDD
EBITDA	$323,251	16%

Is Woodhouse Spa a good franchise investment?

So is this worth investing in a Woodhouse Spa franchise you may ask? Knowing that you would have to finance a significant upfront investment of $1.7 million, much higher than most salons franchises, that’s a valid question indeed.

In other words: are the profits worth the initial investment?

Well we do think so, but the answer isn’t straightforward either. Indeed, we found that, based on the numbers presented in this article, Woodhouse Spa has a 8 – 9 years payback, which means you would reimburse the investment within 8 to 9 years.

Although not necessarily a bad payback period, it’s slightly higher than the average salon franchise (7-8 years). All in all, even if the cost is high ($1.7 million), we do think the profits are worth investing the $1.7 million upfront considering the payback is acceptable.

How does it compare vs. other franchises?

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