Case file 005 · Med spa franchises
What a Med Spa Owner Really Makes
VIO's top quarter of med spas averages $2,320,621 in sales, but across all 51 open a full year, the average is $1,254,631.
The numbers
The story in 30 seconds
The pitch is everywhere: patients who come back, $527 a visit, and top spas selling over $2 million a year. One salesman pitched a spa doing $1.3 million in sales, $400,000 to the bottom line.
At one full-menu brand, about 13 cents of each sales dollar was left before the owner's pay, any loan and tax. And the price to open is often the price before the machine payment, which keeps billing you whether or not anyone walks in.
Scored round by round, the pitch held up twice, partly three times, and once not on paper. The pitch is right about the market; the paperwork is right about your bank account.
Follow the $100
Every $100 of sales at the 14 4Ever Young spas that showed their costs:
Running the spa: ≈ $87
every cost of the spa itself
Left over: ≈ $13
before the owner's pay, any loan payment and tax
our arithmetic
What this means for your business
- 1
Ask for the middle spa, not the best one.
Try thisAsk how many locations are in the sales numbers, out of how many open, and where the middle one sits. Is the brand's required minimum above it?
- 2
Never sign a machine contract that doesn't state its rate.
Try thisMultiply the monthly payment by the number of months, add any other payments, and set the total beside what the machine is worth. One contract came to about $234,000 for a machine valued at about $160,000.
- 3
Rent or share a machine before you own one.
Try thisWait until customers are asking for a treatment before you buy the machine for it. Until then, rent it or share it.
More plays from the video
- Lean on treatments people repeat.
- Don't bet the business on one rule or one supplier.
- Count a prepaid membership as money you owe the customer.
- Talk to every owner you can find, not just the ones the brand sends you to.
How you compare
At 4Ever Young, about 13¢ of each sales dollar was left before the owner's pay. Two wellness franchises from the 40, for comparison:
About 9.9¢ of every dollar is left before the owner's pay. our arithmetic
It costs $764,698 to $1,269,588 to open one.
Run your numbers
Before you sign for a spa, a franchise or a machine, work out two numbers.
If the second number is zero or less, don't sign. A machine keeps billing you whether or not anyone walks in.
