By Peter Saunders
After growing to more than 170 studios in the U.S., with a new location opening almost every week, Elements Massage recently launched a franchise expansion strategy for the Canadian market, marking its first push into international business development. By the end of 2014, the massage therapy franchisor expected to sell 20 Canadian franchise licences and open three studios in Calgary and five in the Greater Toronto Area (GTA).
“Our goal is to consolidate the fragmented industry and become Canada’s largest provider of therapeutic massage services,” says Scott Wendrych, chief franchise development officer for Elements. “We’ve received an increasing number of requests over the years from prospective franchisees in Canada who want to invest in and open Elements studios in their communities.”
Spotting an opportunity
Wendrych joined Elements’ parent company, WellBiz Brands, a little over 12 years ago as a franchisee for its Fitness Together personal training program brand, which had begun franchising in 1996. About two-and-a-half years later, he joined the head office in Highlands Ranch, Colorado, and began looking for new ways to grow the company.
“We realized the Fitness Together concept had a narrow focus, with one-on-one counselling and nutritional advice,” he says. “While it was very successful, it was an expensive service and demand was limited. We therefore wanted to add a second ‘leg’ to the business.”
One day, he and his wife looked into Aurora Therapeutic Massage, a local company that was doing very well. It was owned by certified massage therapist (CMT) Michele Merhib, who had started out by renting space in a local country club for a massage table and chair, then opened a full-fledged retail location in Aurora, Colorado. Her success spawned a second location in nearby Centennial, with 45 employees completing more than 1,300 massage sessions each month.
“We were very impressed by the systems Michele had put in place,” says Wendrych. “She was a good businessperson who had built a strong model from a financial standpoint.”
Curious about the potential to franchise this business, Wendrych researched statistics from the American Massage Therapy Association (AMTA) and found market demand was growing at a rapid pace, as more Americans incorporated massage therapy into their regular health and wellness regimens to assist with medical conditions.
“People were becoming more proactive in their health care,” he says, “but there wasn’t much in the way of ‘retail’ massage therapy yet to make it more convenient for customers. That’s where Michele had found success.”
In November 2006, Fitness Together partnered with Merhib to begin taking the business nationwide. They came up with the new Elements Massage brand, emphasized therapeutic services to stand out from spa franchises and launched the concept in 2007.
The path to service
Besides the convenience factor of opening franchises in plazas and malls, where they can remain top-of-mind for customers doing regular errands, another common thread between the Elements Massage and Fitness Together business models was the ability to accrue recurring revenues through monthly membership fees. Wendrych also felt there was an opportunity to offer a more personalized, professional, premium service.
“While we wanted to position Elements as an affordable therapeutic massage experience,” he says, “we also wanted our franchisees to be able to command a higher price point than some of our competitors.”
To achieve this goal, Wendrych, Merhib and the rest of the franchisor team developed a ‘service path’ approach, which includes matching customers with the right type of therapist—a practice Merhib had pioneered—and measuring feedback after appointments.