Innovation

Franchising: The hand of experience

Written by Ian Portsmouth

Hand & Stone Massage Spas
Canadian head office: Richmond Hill, Ont.
Line of business: Relaxation massage spas
Founded: 2009 (2004 in U.S.)
Canadian locations: 1
U.S. locations: 30
Approximate launch cost: $230,000 to $350,000
Royalties: 6% of gross sales

Gigi and Brett Harding have franchising in their blood. In 1979, their dad launched Kwik Kopy Design & Print Centres in Canada after buying the Canadian franchisor rights. The siblings started work in Kwik Kopy stores as teenagers in the early 1980s, eventually rising to the posts of CEO and president of the franchisor, respectively. Brett even ran his own Kwik Kopy outlet for 10 years in between.

So, what else does a duo with more than 50 years of print-services experience between them do for their next act, but get into the massage business?

Last fall, the Hardings launched Hand & Stone Massage Spas Canada Inc. with a corporate outlet in Vaughan, a Toronto suburb. “Five years ago, we started looking at how we could apply our expertise to another concept,” says Gigi. Working through a franchise broker who scoured the U.S. for possibilities, they settled on Hand & Stone, a six-year-old, 30-outlet chain born in Roslyn Heights, N.Y.

In Hand & Stone, the Hardings saw a chance to be first to market in Canada with branded massage “spas” offering the convenience of stores that operate 88 hours over seven days a week in big-box malls, short appointment lead times and discount prices — benefits most mom-and-pop massage shops can’t match. The siblings see it as the perfect solution for consumers who are tuning into wellness but lead lives too busy to find — or wait for — a good massage.

However, franchised chains are often associated with poor quality. (The term “McMassage” has already been applied to chain-store massages.) The Hardings say their stores will hire only registered massage therapists (RMTs), and new recruits will learn customer-relations techniques and specific treatments from a corporate trainer.

Although Hand & Stone’s regular massage rates are in line with industry norms, it sells memberships offering a significant discount (say, $60 instead of $80) that increases with subsequent massages. It looks like a win-win: franchisees get recurring revenue and clients get cheap treatments they can bank if unused. But will low prices lead to low pay and second-rate therapists? The Hardings say therapists at their flagship store are on pace to make $45,000 to $55,000 this year — not bad versus the $27,000 or less made by 60% of recent RMT grads. Moreover, says Brett, “You don’t have to worry about attracting your own bookings. You just come in and do your craft.”

Hand & Stone franchisees are promised significant marketing support, especially in their first year. Still, the Hardings say that owners need to be outgoing community members to get people in the door. “We can teach you systems,” says Brett. “What we can’t teach you to be is a great person.” After that, they believe that Hand & Stone’s “affordable luxury” will keep customers coming back.

The membership model seems to work in the U.S., where, says Gigi, the typical Hand & Stone outlet has 400 to 600 members. But Coquitlam, B.C.-based franchising consultant Wayne Maillet says subtle cross-border differences trip up many imported concepts. The Hardings say they’ve responded to this gap by, for instance, replacing the U.S. tag line “The Upscale Massage Spa without the Upscale Massage Price” with “Experience the Difference of Affordable Luxury.” Says Brett: “You have to be a touch softer in Canada.” Which seems to suit a company selling relaxation massages.

Originally appeared on PROFITguide.com
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