Risk Score
Pending analysis
Investment Range
$719,350 - $1,081,000
Franchise Fee
$28,000
Min Cash Required
$117,000
Total US Locations
1,009
Business Summary
Massage Envy Franchising, LLC offers franchises to operate personal health businesses under the brand name "Massage Envy®." These businesses provide professional therapeutic massage services, the proprietary Total Body Stretch service, hot stone massage therapy, and customized facial and/or skin care services. These offerings utilize unique processes and high-end product lines, all delivered through a membership-based program in a clean and friendly environment.
Corporate History
Massage Envy Franchising, LLC was organized in Delaware on March 15, 2019, and became the franchisor in June 2019 following a corporate restructuring as part of a secured financing transaction. The Massage Envy brand's business model originated earlier, with an affiliate, Massage EN V LLC, operating traditional Massage Envy Businesses in Phoenix, Arizona, between February 2002 and October 2006. Massage Envy Franchising, LLC's immediate predecessor, also named Massage Envy Franchising, LLC (MEF), was the franchisor prior to June 2019, having been formed in 2009. MEF acquired assets from its predecessor, Massage Envy Limited, LLC, in December 2009. ME Limited had offered franchises for traditional Massage Envy Businesses since February 2003. In 2012, MEF's indirect parent company was acquired by entities controlled by Roark Capital Group. Currently, Massage Envy Franchising, LLC exclusively offers franchises for 'total body care' Massage Envy Businesses, which expand beyond traditional massage to include services like stretch therapy, hot stone therapy, and customized skin care.
Financial Overview
Investment Range
$719,350 - $1,081,000
Franchise Fee (Low)
$28,000
Franchise Fee (High)
$45,000
Minimum Cash Required
$117,000
Royalty %
6%
Marketing %
2%
Equipment Costs (Low)
$508,600
Equipment Costs (High)
$745,500
Working Capital
$123,500
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Massage Envy Franchising, LLC demonstrates strong financial health, consistently reporting high net income and positive working capital over the past three fiscal years (2022-2024). The company is a key part of a securitization structure and guarantees substantial debt, but the financial statements indicate compliance with all debt covenants. Its financial statements have received an unqualified opinion from independent auditors, signaling that they are presented fairly.
Financing Details
Massage Envy Franchising, LLC does not offer any direct or indirect financing to its franchisees, nor does it guarantee their notes, leases, or other obligations. Franchisees are responsible for securing their own financing.
Performance Metrics
Total US Locations
1,009
Franchised Units
1,009
Corporate Units
0
Avg Square Footage
2,550
Franchising Since
2003
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
122
Litigation Summary
Massage Envy Franchising, LLC has been involved in several litigation matters, both active and concluded, as well as actions against its franchisees. Currently, Massage Envy Franchising is a defendant in a putative class action lawsuit filed in August 2024, alleging improper monthly membership fee charges after franchised locations closed. Additionally, a consumer class action from 2016 concerning alleged wrongful increases in monthly membership fees is ongoing, with an appeal regarding attorney's fees pending since a settlement was reached in June 2022. The company also faces numerous lawsuits (undisclosed specific number, but described as 'numerous') where customers allege sexual misconduct by massage therapists at franchised locations, claiming negligence, deceptive practices, and vicarious liability. Massage Envy Franchising denies these claims and vigorously defends the actions, having settled some cases and potentially seeking indemnification from franchisees. In 2024, the franchisor initiated six separate arbitration demands against franchisees for wrongful abandonment of their businesses and two separate arbitration demands for failure to comply with mandatory technology updates; these have been resolved in the franchisor's favor. In prior years, from 2020-2022, the company resolved 104 individual arbitration actions with franchisees alleging breach of contract for mandated systems and fees, and settled a franchisee's claim for territorial rights and fraudulent inducement in August 2022. The company also states that litigation against affiliated franchise programs (such as Arby's and Dunkin') regarding 'no-poaching' clauses and cyberattacks do not impact the Massage Envy brand or allege unlawful conduct by it.
Bankruptcy History
Massage Envy Franchising, LLC states that other than potential bankruptcy cases of its Regional Developers as disclosed in Exhibit G (if any), Massage Envy Franchising, LLC has no bankruptcy history to disclose. Exhibit G, which lists current Regional Developers, does not disclose any bankruptcy cases for current Regional Developers.
Agreement Terms
Initial Term
10 years
Renewal Conditions
To renew, Massage Envy franchisees must give appropriate notice (12 to 15 months prior to expiration) of their election to acquire a successor franchise. They must maintain possession of their approved site, meet the franchisor's then-applicable standards for franchisees, including character, skill, aptitude, attitude, English language proficiency, business ability, and financial capacity. Franchisees are also required to remodel their site to comply with current brand standards, sign a general release (with specified exceptions), pay a successor fee equal to two-thirds of the then-current initial franchise fee for a new Massage Envy Business, and sign the franchisor's then-current form of Franchise Agreement, which may include materially different terms and conditions.
Training & Support Program
Franchisor Assistance
Massage Envy Franchising provides franchisees with extensive pre-opening assistance, including site review, territory identification and approval, lease criteria and final review, development management for construction, and occupancy management for equipment and design. This involves approving the site and lease, providing design specifications, and reviewing construction documents. Franchisees receive an initial training program for their Managing Owner, Business Manager, and up to three additional management personnel. This training, totaling approximately 15 days, covers brand promise, business management, and team leadership through a combination of classroom/virtual sessions (about 5 days) and on-site operational support (about 10 days). After opening, Massage Envy Franchising offers ongoing advice, guidance, and support for business operations based on franchisee reports and franchisor inspections. This support is delivered through the Operations Manual (accessed online), bulletins, electronic media, telephone consultations, and in-person consultations. Additional or special guidance and training are available for a fee. Franchisees and their trained employees may also be required to attend up to 5 days of refresher training courses and a national business meeting or convention up to 3 days annually, with associated fees and travel expenses.
Initial Training Hours
120
Training Location
Training is conducted at the Massage Envy Franchise Support Center in Scottsdale, Arizona, which may include a virtual setting, and also on-site at the franchisee's business location or another designated location.
Ongoing Support
After opening, Massage Envy Franchising provides ongoing advice and guidance for business operations, utilizing franchisee reports and franchisor inspections. This support is delivered through the Operations Manual, electronic media, and telephone consultations, as well as consultations at the franchisor's office or the franchisee's location. Franchisees can request additional or special guidance, assistance, or training for an applicable fee. Furthermore, franchisees and/or their previously trained employees may be required to attend up to 5 days of additional or refresher training courses each year, and a national business meeting or convention for up to 3 days annually, with the franchisee responsible for associated fees and travel expenses.
Franchise Requirements
Ideal Candidate Profile
Massage Envy Franchising seeks franchisees who meet minimum standards in character, skill, aptitude, attitude, business ability, and financial capacity. The ideal candidate must designate one of their owners to serve as the 'Managing Owner,' who must hold at least a 20% ownership interest in the franchise and act as the primary manager of the business. This Managing Owner is expected to commit full-time efforts to managing and supervising the business and must not engage in other significant business activities that could conflict with their franchise obligations. Additionally, a 'Business Manager' is required to exert full-time efforts in fulfilling the business's obligations. If the Managing Owner does not also serve as the Business Manager, the Managing Owner is responsible for supervising all activities of the Business Manager.
Industry Experience Required
No
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Retail
Owner Participation
Full-Time
Territory Type
Limited
Territory Size Requirements
Massage Envy Franchising grants a geographic territory that meets its criteria for minimum population, qualified households, age range of core customers, and therapist availability. Specifically, a suburban and independent market territory requires a minimum of 7,500 'qualified households.' A qualified household in a suburban market has an average annual income exceeding $75,000, while in an independent market, it exceeds $50,000. The territory's size and shape are also influenced by factors such as population density, core customer counts, market trends, traffic flow, the locations of other Massage Envy Businesses, and natural and man-made boundaries. The territory is precisely defined using street map landmarks, compass directions, or a radius of miles.
Staffing Notes
Each Massage Envy Business must designate a 'Managing Owner' who holds at least a 20% ownership interest in the franchise and serves as the primary manager, dedicating full-time efforts to the business. Additionally, a 'Business Manager' is required to exert full-time efforts in managing the business; the Managing Owner may fulfill this role or supervise a separate Business Manager. Both Managing Owners and Business Managers must successfully complete the initial training program. The franchisor reserves the right to regulate staffing levels, employee qualifications, training, dress, and appearance, and may require employees with access to confidential information to sign confidentiality agreements. However, Massage Envy Franchising explicitly states that it has no control over the franchisee's labor relations, including employee selection, termination, wages, or working conditions, affirming that franchisees are the sole employers of their staff.