MASSAGELUXE

Item 7 of the 2024 FDD outlines a hefty initial investment range of $569,600 to $799,900, including the $42,500 franchise fee, driven by build-out costs for premium spa setups in high-traffic areas. Ongoing fees stack up: 6% royalty on gross sales, plus 2.5% regional advertising, 1% national ad fund, and a flat $650 monthly POS software charge—totaling around 9.5% plus fixed costs, above average for wellness services where royalties often cap at 6-7%. Item 19 shines here, reporting average gross revenues of $894,603 and median $851,068 across franchised units, suggesting solid top-line performance but requiring 20-25% margins for viability after fees and ops, assuming $200K+ EBITDA potential for top performers.

System health shows 86 locations after 16 years franchising, with only 4 projected new units signaling contraction risk amid wellness market saturation. Nine system transfers in the latest FDD period indicate active resale market—potentially liquidating underperformers—but low organic growth from headquarters in Chesterfield, MO, raises flags on support efficacy. For investors eyeing passive wellness plays, the revenue heft tempts, yet high fees and tepid expansion demand scrutiny of local market saturation and franchisee satisfaction before committing over $600K.