In this exclusive Franchise Chatter FDD Talk post, you’ll learn the following:

Section I – Estimated initial investment (franchise costs) for a Hand & Stone Massage and Facial Spa franchise, based on Item 7 of the company’s 2024 FDD

Section II – Initial franchise fee, royalty fee, and marketing fee for a Hand & Stone Massage and Facial Spa franchise, based on Items 5 and 6 of the company’s 2024 FDD

Section III – Number of franchised and company-owned Hand & Stone Massage and Facial Spa outlets at the start of the year and the end of the year for 2021, 2022, and 2023, based on Item 20 of the company’s 2024 FDD

Section IV – News updates on the Hand & Stone Massage and Facial Spa franchise opportunity

Section V – Presentation and analysis of Hand & Stone Massage and Facial Spa’s financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2024 FDD, including information on the:

• 2023 average, median, highest, and lowest gross sales and average number of members for the 15 subsidiary-owned, 483 franchised, and 498 subsidiary-owned and franchised (combined) Hand & Stone Massage and Facial Spa outlets that were open 12 months or more as of December 31, 2023

• 2023 average, median, highest, and lowest massage sales for the 15 subsidiary-owned, 483 franchised, and 498 subsidiary-owned and franchised (combined) Hand & Stone Massage and Facial Spa outlets that were open 12 months or more as of December 31, 2023

• 2023 average, median, highest, and lowest facial sales for the 15 subsidiary-owned, 483 franchised, and 498 subsidiary-owned and franchised (combined) Hand & Stone Massage and Facial Spa outlets that were open 12 months or more as of December 31, 2023

• 2023 average, median, highest, and lowest gift card sales for the 15 subsidiary-owned, 483 franchised, and 498 subsidiary-owned and franchised (combined) Hand & Stone Massage and Facial Spa outlets that were open 12 months or more as of December 31, 2023

• 2023 average, median, highest, and lowest retail sales for the 15 subsidiary-owned, 483 franchised, and 498 subsidiary-owned and franchised (combined) Hand & Stone Massage and Facial Spa outlets that were open 12 months or more as of December 31, 2023

• average, median, highest, and lowest size, first year net rent, and landlord allowance for the 20 Hand & Stone Massage and Facial Spa franchised outlets that opened in 2023

• 2023 average gross sales, labor and benefits costs, occupancy costs, Royalties/National Marketing, and other operating costs for the 14 Hand & Stone Massage and Facial Spa subsidiary-owned outlets that were owned and operated by the franchisor’s affiliates for the entirety of the 2023 calendar year

Section VI – Key ratios, comparables, computations, and analyses for the Hand & Stone Massage and Facial Spa franchise opportunity (exclusive content for Platinum subscribers)

Section I – Hand & Stone Massage and Facial Spa Franchise Costs

• Franchise Fee:  $26,000 to $49,500
• Deposits (Rent, Utilities):  $13,363 to $20,000
• Leasehold Improvements:  $361,797 to $394,171
• Furniture, Fixtures, and Equipment:  $47,252 to $63,095
• Computer/POS System:  $6,498 to $19,932
• Connectivity Fee:  $2,500
• Insurance:  $1,500 to $2,500
• Office Equipment and Supplies:  $7,772 to $20,467
• Camera/Music System:  $11,748 to $17,742
• Initial Inventory:  $12,250 to $18,384
• Other Pre-Opening Expenses (Travel, Grand Opening):  $11,000 to $18,300
• Signage:  $13,806 to $23,349
• Licenses, Permits, and Architectural Fees:  $12,784 to $15,164
• Legal and Accounting:  $3,425 to $5,150
• Additional Funds (9 Months):  $70,000 to $90,000
• Total Estimated Hand & Stone Massage and Facial Spa Franchise Costs:  $601,695 to $760,254

Section II – Hand & Stone Massage and Facial Spa’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

• Initial Franchise Fee:  $32,500 to $49,500
• Royalty Fee:  5% of Gross Sales for the first 52 weeks of operation, then 6% of Gross Sales thereafter
• Marketing Fund Contribution:  1% of Gross Sales
• Local Advertising Fee:  4% of Gross Sales (with a minimum amount of $400 per week)

Section III – Number of Franchised and Company-Owned Hand & Stone Massage and Facial Spa Outlets

Franchised

2021

• Outlets at the Start of the Year:  449
• Outlets at the End of the Year:  461
• Net Change:  +12

2022

• Outlets at the Start of the Year:  461
• Outlets at the End of the Year:  487
• Net Change:  +26

2023

• Outlets at the Start of the Year:  487
• Outlets at the End of the Year:  527
• Net Change:  +40*
• *This figure includes 24 Outlets that converted to the System in the 2023 calendar year (the “Conversion Outlets”).

Company-Owned

2021

• Outlets at the Start of the Year:  2
• Outlets at the End of the Year:  12
• Net Change:  +10

2022

• Outlets at the Start of the Year:  12
• Outlets at the End of the Year:  14
• Net Change:  +2

2023

• Outlets at the Start of the Year:  14
• Outlets at the End of the Year:  15
• Net Change:  +1

Section IV – News Updates on the Hand & Stone Massage and Facial Spa Franchise

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the Hand & Stone Massage and Facial Spa Franchise (Item 19, 2024 FDD)

• This Item presents certain historical data as provided by Hand & Stone’s franchisees and subsidiary-owned outlets. Hand & Stone has not audited this information, nor independently verified this information.

• The information contained in this Item is for the period January 1, 2023 through December 31, 2023 (the “2023 Calendar Year”).

• As of December 31, 2023, Hand & Stone had 527 franchised outlets open in the United States and 15 subsidiary-owned outlets open in the United States (the “Subsidiary Outlets”).

• Hand & Stone, through its subsidiaries, acquired 10 of the 15 Subsidiary Outlets in the 2021 Calendar Year. One of the Subsidiary Outlets is located in New Jersey and the remaining 14 are located in Florida. All of the Subsidiary Outlets have been open for more than 24 months and are substantially similar to the franchise opportunity being offered under the Franchise Disclosure Document.

Part 1 – Average Gross Sales for Outlets Open 12 Months or More (Calendar Year 2023)

Subsidiary Outlets

• Number of Subsidiary Outlets:  15
• 2023 Average Gross Sales:  $2,219,232
• Number Above/Below Average:  11/4
• Percentage Above/Below Average:  73%/27%
• 2023 Median Gross Sales:  $1,960,601
• 2023 Minimum Gross Sales:  $1,259,152
• 2023 Maximum Gross Sales:  $3,422,872
• 2023 Average Members:  1,992
• Number Above/Below Average:  11/4
• Percentage Above/Below Average:  73%/27%

Franchised Outlets

• Number of Franchised Outlets:  483
• 2023 Average Gross Sales:  $1,365,793
• Number Above/Below Average:  208/275
• Percentage Above/Below Average:  43%/57%
• 2023 Median Gross Sales:  $1,275,538
• 2023 Minimum Gross Sales:  $280,116
• 2023 Maximum Gross Sales:  $4,056,316
• 2023 Average Members:  1,090
• Number Above/Below Average:  192/291
• Percentage Above/Below Average:  40%/60%

All Outlets

• Number of Outlets:  498
• 2023 Average Gross Sales:  $1,391,448
• Number Above/Below Average:  210/288
• Percentage Above/Below Average:  42%/58%
• 2023 Median Gross Sales:  $1,292,188
• 2023 Minimum Gross Sales:  $280,116
• 2023 Maximum Gross Sales:  $4,056,316
• 2023 Average Members:  1,118
• Number Above/Below Average:  198/300
• Percentage Above/Below Average:  40%/60%

• For purposes of this Item 19, Gross Sales means the aggregate of all revenue collected from the sale of products, gift cards, barter or exchange, complimentary services, and services from all sources in connection with the franchised outlet, whether for check, cash, credit, or otherwise, including all proceeds from any business interruption insurance, but excluding tips received by massage therapists and estheticians, any sales and equivalent taxes that you collect and pay to any governmental taxing authority, and the value of any allowance issued or granted to any of your customers that you credit in full or partial satisfaction of the price of any products and services offered by the franchised outlet.

• For Parts 1 through 3, the Average Gross Sales is defined as the sum of the Gross Sales of the included outlets, divided by the total number of included outlets. “Median” represents the middle number of which half of the included outlets exceeded and half did not.

• The businesses presented above range in size from 6 to 20 treatment rooms per location.

• “Average Number of Members” is the average number of members reported by the included franchised outlets who have joined Hand & Stone’s Lifestyle program as monthly, annual, or prepaid members (but excluding three-month memberships) and pay a monthly membership fee currently ranging from $59.95 to $89.95 per month.

• The Average Number of Members is defined as the sum of the members reported by the included outlets divided by the total number of included outlets. The Average Number of Members count does not deduct suspended or frozen members who are not currently paying monthly fees.

Part 2 – Average Massage Sales for Outlets Open 12 Months or More (Calendar Year 2023)

Subsidiary Outlets

• Number of Subsidiary Outlets:  15
• 2023 Average Massage Sales:  $1,225,824
• Number Above/Below Average:  11/4
• Percentage Above/Below Average:  73%/27%
• 2023 Minimum Massage Sales:  $744,617
• 2023 Maximum Massage Sales:  $1,978,358
• 2023 Median Massage Sales:  $1,137,017

Franchised Outlets

• Number of Franchised Outlets:  483
• 2023 Average Massage Sales:  $797,989
• Number Above/Below Average:  218/265
• Percentage Above/Below Average:  45%/55%
• 2023 Minimum Massage Sales:  $146,629
• 2023 Maximum Massage Sales:  $2,023,773
• 2023 Median Massage Sales:  $804,111

All Outlets

• Number of Outlets:  498
• 2023 Average Massage Sales:  $810,850
• Number Above/Below Average:  224/274
• Percentage Above/Below Average:  45%/55%
• 2023 Minimum Massage Sales:  $146,629
• 2023 Maximum Massage Sales:  $2,023,773
• 2023 Median Massage Sales:  $807,459

Part 3 – Average Facial Sales for Outlets Open 12 Months or More (Calendar Year 2023)

Subsidiary Outlets

• Number of Subsidiary Outlets:  15
• 2023 Average Facial Sales:  $779,586
• Number Above/Below Average:  11/4
• Percentage Above/Below Average:  73%/27%
• 2023 Minimum Facial Sales:  $396,970
• 2023 Maximum Facial Sales:  $1,408,379
• 2023 Median Facial Sales:  $695,376

Franchised Outlets

• Number of Franchised Outlets:  483
• 2023 Average Facial Sales:  $483,458
• Number Above/Below Average:  206/277
• Percentage Above/Below Average:  43%/57%
• 2023 Minimum Facial Sales:  $73,649
• 2023 Maximum Facial Sales:  $1,836,729
• 2023 Median Facial Sales:  $493,810

All Outlets

• Number of Outlets:  498
• 2023 Average Facial Sales:  $492,359
• Number Above/Below Average:  211/287
• Percentage Above/Below Average:  42%/58%
• 2023 Minimum Facial Sales:  $73,649
• 2023 Maximum Facial Sales:  $1,836,729
• 2023 Median Facial Sales:  $495,046

• “Facial Sales” are defined as Gross Sales of skin care services and products, including facials, microdermabrasion, and peels, and are included in the average gross sales above.

• The Average Facial Sales is defined as the sum of the Facial Sales of the included outlets divided by the total number of included outlets.

Part 4 – Average Gift Card Sales for Outlets Open 12 Months or More (Calendar Year 2023)

Subsidiary Outlets

• Number of Subsidiary Outlets:  15
• 2023 Average Gift Card Sales:  $275,964
• Number Above/Below Average:  11/4
• Percentage Above/Below Average:  73%/27%
• 2023 Minimum Gift Card Sales:  $138,836
• 2023 Maximum Gift Card Sales:  $579,538
• 2023 Median Gift Card Sales:  $242,658

Franchised Outlets

• Number of Franchised Outlets:  483
• 2023 Average Gift Card Sales:  $169,907
• Number Above/Below Average:  216/267
• Percentage Above/Below Average:  45%/55%
• 2023 Minimum Gift Card Sales:  $36,316
• 2023 Maximum Gift Card Sales:  $779,311
• 2023 Median Gift Card Sales:  $161,996

All Outlets

• Number of Outlets:  498
• 2023 Average Gift Card Sales:  $173,095
• Number Above/Below Average:  222/276
• Percentage Above/Below Average:  45%/55%
• 2023 Minimum Gift Card Sales:  $36,316
• 2023 Maximum Gift Card Sales:  $779,311
• 2023 Median Gift Card Sales:  $163,976

Part 5 – Average Retail Sales for Outlets Open 12 Months or More (Calendar Year 2023)

Subsidiary Outlets

• Number of Subsidiary Outlets:  15
• 2023 Retail Sales:  $117,905
• Number Above/Below Average:  11/4
• Percentage Above/Below Average:  73%/27%
• 2023 Minimum Retail Sales:  $65,994
• 2023 Median Retail Sales:  $103,178

Franchised Outlets

• Number of Franchised Outlets:  483
• 2023 Retail Sales:  $64,485
• Number Above/Below Average:  199/284
• Percentage Above/Below Average:  41%/59%
• 2023 Minimum Retail Sales:  $1,819
• 2023 Maximum Retail Sales:  $320,432
• 2023 Median Retail Sales:  $60,869

All Outlets

• Number of Outlets:  498
• 2023 Retail Sales:  $66,091
• Number Above/Below Average:  201/297
• Percentage Above/Below Average:  40%/60%
• 2023 Minimum Retail Sales:  $1,819
• 2023 Maximum Retail Sales:  $320,432
• 2023 Median Retail Sales:  $61,194

Part 6 – Average Size, First Year Net Rent, and Landlord Allowance for Franchised Outlets Opened During 2023

• Average Number of Openings:  20

• Average Size:  2,750 square feet
• Number Above/Below Average:  11/9
• Percentage Above/Below Average:  55%/45%
• Median Size:  2,787 square feet
• Minimum Size:  1,860 square feet
• Maximum Size:  3,870 square feet

• Average Rent: $103,457
• Number Above/Below Average:  10/10
• Percentage Above/Below Average:  50%/50%
• Median Rent:  $102,730
• Minimum Rent:  $71,217
• Maximum Rent:  $156,634

• Average Landlord Contribution:  $127,106
• Number Above/Below Average:  8/11
• Percentage Above/Below Average:  42%/58%
• Median Tenant Improvement:  $118,391
• Minimum Tenant Improvement:  $0
• Maximum Tenant Improvement:  $259,417

• “Size” refers to the size of the gross leasable square footage of the outlet.

• The Average Size is defined as the sum of the Size of the included outlets divided by the number of included outlets.

• “First Year Net Rent” means the aggregate of all rental costs during the first year of operation to include rent price per square foot, taxes, insurance, and common area maintenance costs while deducting any rental abatements granted by the landlord.

• The Average First Year Net Rent is defined as the sum of First Year Net Rent of the included outlets divided by the total number of included outlets.

• “Average TI” means the average tenant improvement allowance granted from a landlord to a franchisee to contribute to the tenant’s construction build out of leasehold improvements. There were 20 franchised outlets that opened in 2023.

Part 7 – Corporate Spa Average Revenue and Expenses for 14 Subsidiary Outlets for the Calendar Year 2023

• Average Gross Sales:  $2,156,024 (100.0%)
• Average Labor and Benefits Costs:  $997,807 (46.3%)
• Average Occupancy Costs:  $141,054 (6.5%)
• Average Royalties/National Marketing:  $149,083 (6.9%)
• Average Other Operating Costs:  $384,143 (17.8%)

• Part 7 reflects certain performance information for the 14 Subsidiary Outlets that were owned and operated by the franchisor’s affiliates for the entirety of the 2023 Calendar Year. One of the 15 Subsidiary Outlets were excluded from the results presented in Part 7 because they were acquired by the franchisor’s affiliate in the 2023 calendar year.

• The 14 Subsidiary Outlets are mature businesses that have been in operation for between 3 years and 13 years. Fourteen of the Subsidiary Outlets are located in Florida and 1 Subsidiary Outlet is located in New Jersey.

• “Labor and Benefits Costs” means the total direct and indirect labor costs of manager and hourly wages, payroll taxes, and employment benefits incurred by the 14 Subsidiary Outlets during the 2023 Calendar Year. Labor and Benefits Costs does not include owners’ pay.

• “Occupancy Costs” means the total base rent, triple net charges (common area maintenance, insurance, and taxes) reported to have been paid by the 14 Subsidiary Outlets during the 2023 Calendar Year.

• “Royalties/National Marketing” means the total Royalty Fees and National Marketing Fees paid to Hand & Stone by the 14 Subsidiary Outlets during the 2023 Calendar Year.

• “Other Operating Costs” includes the following expenses incurred by the 14 Subsidiary Outlets during the 2023 Calendar Year: local advertising, supplies and linens, equipment, IT/software, promotional and loyalty program expenses, insurance, and credit card processing fees. Certain incurred shared expenses that are allocated to the operation of all subsidiary locations have been excluded from this category.

• The expenses presented in Part 5 do not include all expenses incurred by the 14 Subsidiary Outlets during the 2023 Calendar Year. You may incur additional costs and expenses.

Section VI – Hand & Stone Massage and Facial Spa Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️