These four brands are at your service
Working out in an infrared sauna setting open 24 hours? Why not, at Hotworx, an emerging franchise in the fast-growing personal and consumer services segment. See more on this and three other brands on the following pages.
In a franchise sector that’s expected to outpace the overall economy in 2018, the consumer and personal services segment is really where the action is.
Franchise personal services experienced strong growth over the past year and is expected to rank first in growth of the number of establishments and in employment in 2018.
That’s according to the 2018 Franchise Business Outlook, a new report from the International Franchise Association, which estimates 3 percent growth in the number of personal services franchises along with 5 percent employment growth. It’s a segment rich with diverse concepts covering entertainment and recreation, fitness, health care and even tax brands.
Gains in real income and household net worth are supporting an increase in spending on personal services economy-wide, the report notes, and the gross domestic product of the overall franchise sector is forecast to exceed U.S. gross domestic product growth and increase by 6.1 percent to $451 billion.
Franchise Times Top 200+ data shows brands in this segment have seen staggering sales growth in recent years, with fitness concepts such as Planet Fitness and Anytime Fitness increasing systemwide sales 26.7 percent and 13.6 percent, respectively, in 2016 from the year before. Hand & Stone Massage and Facial Spa was another business that saw a huge lift, growing sales 23.4 percent in 2016.
A few other standouts in consumer and personal services: Tide Dry Cleaners grew 27 percent, KLA Schools grew 40 percent and Junk King grew 100 percent, the Franchise Times Top 200+ shows.
Here we take a look at four new entrants into the space, each vying for a different piece of the consumer and personal services franchise pie and each saying they’re differentiating themselves from their competitors. Turn the page to meet Chefs For Seniors, Oxxo Care Cleaners, Sirius Day Spa and Hotworx.
CHEFS FOR SENIORS
The concept: Recognizing senior malnutrition as “a huge problem in this country,” Nathan Allman and his executive chef father Barrett created Chefs For Seniors, in which locally based professional chefs prepare fresh, affordable meals for the week in the homes of elderly clientele. “It’s a concept that really appeals to chefs who want to get out of the grind of restaurants,” says Allman of the company’s franchise partners.
The stats: Chefs For Seniors offers three investment levels based on territory size: Basic ($9,250-$15,600), which Allman says is “great for a personal chef who wants to cook for clients themselves;” Extended ($13,495-$21,345), for franchisees who’ll employ a small team of chefs; and Regional ($18,170-$26,570), with the franchisee serving in a managerial versus chef role. Based in Madison, Wisconsin, Chefs For Seniors has seven franchises locations in Arizona, Florida, New Jersey, Massachusetts, Colorado and North Carolina.
The competition: “We really identified this as an underserved market,” says Allman, noting the uniqueness of preparing the meals in the home, with chefs interacting with clients, versus food delivery services such as Meals on Wheels. Chefs For Seniors does compete with other personal catering services, and even meal services such as BistroMD and Mom’s Meals.
The challenge: “Finding the right ways to generate leads” is difficult, says Allman. They tried various franchise portals but weren’t getting quality prospects and have since turned their efforts to Facebook advertising, along with targeting people with a background in foodservice.
The concept: Wanting to “give customers more workout in less time,” Stephen Smith developed Hotworx, a concept that offers a variety of 30-minute pilates, hot yoga, isometric and high intensity interval training classes in an infrared sauna setting open 24 hours a day. Virtual instructors lead each class and “staff is minimal so that’s great for profitability,” says Smith. “I thought perhaps people would discount the value because it’s virtual, but they don’t. It appeals to them because they know classes start on time, it’s a small setting and they maximize their workout time.”
The stats: Since the first Hotworx opened in Oxford, Mississippi, in February 2017 the brand has added nine locations in Texas and Tennessee and Mississippi, with 30-plus units in development. Several dozen workout saunas are also located within Planet Beach spas across the country. Hotworx is a sister brand of Planet Beach, also co-founded by Smith. The initial total investment range is $148,500-$333,690.
The competition: Numerous gym and fitness brands are out there but Smith doesn’t view concepts such as Orangetheory and Anytime Fitness as head-to-head competitors. With its $60 monthly membership, “we fit very neatly in between” those brands, he says, and more consumers are maintaining multiple memberships. Smith is actually an Anytime member as well “because I like the heavy weights.”
The challenge: Education. Getting the various jurisdictions and municipalities where Hotworx wants to open to “understand the sauna concept, what it is and how it fits into their spaces” is a challenge as the brand grows, says Smith.
OXXO CARE CLEANERS
The concept: Drawing from his career in the textiles and plastics industries in Colombia and Venezuela, Salomon Mishaan founded dry cleaning franchise Oxxo Care Cleaners in 2001 with an eco-friendly approach. “When I got here I realized the dry cleaning industry was 50 years behind where it could be,” says Mishaan.“I looked for ways to make it simpler and cleaner.” Instead of petrochemicals, Oxxo uses liquid silicone-based GreenEarth cleaning solvents. And with 24/7 ATM-style pick-up and drop-off, Oxxo checks the convenience box.
The stats: Based in Hollywood, Florida, Oxxo has about 50 locations in Florida, New Jersey and Texas, plus seven in Indonesia. The initial investment range is $443,000-$644,500, and the company is focusing on multi-unit ownership. In addition to complete dry cleaning and laundry “plant stores,” Oxxo also has drop store and ATM-style unit options for existing franchisees, ranging in investment from $130,000-$170,000.
The competition: Mom-and-pop dry cleaners are Oxxo’s biggest competitors, says Mishaan, along with national chains such as Tide Dry Cleaners and Martinizing Dry Cleaning.
The challenge: “Rent is one of the biggest costs in dry cleaning, so that’s why we want the smallest square footage possible and why we automate everything,” says Mishaan. Another challenge is finding qualified franchisees in the brand’s target expansion areas, which are currently Texas and New Jersey. “Once we get them on board, it’s going to be quick growth.”
SIRIUS DAY SPA
The concept: From massages, facials and waxing to eyelash extensions and even teeth whitening, Sirius Day Spa offers an array of services in an upscale environment but with a two-tier membership model ($59 and $89) President Lyle Myers says is attractive for consumers seeking convenience. “Sirius is disruptive in that we’ve taken all those single service memberships and put them all under one roof,” he says. Sirius is a concept from The Leonesio Group, which previously launched Massage Envy, The Joint and Amazing Lash Studio.
The stats: Sirius is focused on growth via the regional developer model, with developers selling franchises in a specific region—often an entire state—and assisting with openings and supporting franchisees. The initial investment range for a regional developer is $98,775-$280,725 and for a franchise location the investment is $477,950-$698,750. Sirius has signed 290 regional development deals and has two spas open, in Lodi, California, and Scottsdale, Arizona.
The competition: There are other resort and day spa brands out there, says Myers, along with personal wellness franchise concepts such as those developed by The Leonesio Group all going after a similar consumer. Where Sirius hopes to make its mark is by giving members “that resort, day spa feel at an affordable price.”
The challenge: “The biggest challenge we have right now is we’re new,” says Myers, which means it’s necessary to find business-savvy individuals who understand the marketing needed to successfully open a location and become cash-flow positive.