Arizona Entrepreneur Takes Chance On Day Spas Hand & Stone

Tuesday, November 23, 2010

"Work at something you like and the money will follow."

That's the advice entrepreneur Maggie Brown is following with a business venture that she hopes will provide retirement income for her and her husband and, perhaps, a legacy for their family.

Three years ago, she left a fast-paced career selling high-tech electronic components and entered the business of stress relief, relaxation and feeling good.

She and her husband, Skip Papanikolas, also a manufacturer's representative for electronics companies, cashed in their retirement plans, mortgaged their house and bought regional franchise rights for Hand & Stone Massage & Facial Spa.

Loosely patterned after competitor Massage Envy, Hand & Stone is a membership-based day spa that offers discounted massages and facials to members who pay a monthly fee.

Brown, 55, said the membership concept, similar to that used by health clubs, provides a stable cash flow and allows the business to plan for a scheduled level of service. The monthly fee includes one massage or facial.

"It was a business model that really impressed me," Brown said.

Stress relief Owning spas was hardly a lifelong aspiration.

Until she became a member of Massage Envy about five years ago, Brown could have counted the number of massages she'd had in her life on one hand.

"I was looking to relieve some stress and really got hooked," she said.

Brown said she was amazed at how much better she felt, both physically and mentally, after her regular massage. She also was amazed at the apparent success of the Massage Envy franchise she patronized.

About the same time, she and her husband were looking for a stable business they could work at into retirement. As it turned out, Brown found her retirement-business opportunity was right under her nose - at least when she was lying face down on a massage table.

"It hit me that this was the perfect business to get into," she said of the Massage Envy franchise. "It was a pleasant, relaxing environment. The startup costs didn't seem too great, and there was clearly a huge demand for their services." Scottsdale-based Massage Envy developed the spa-club franchise model in 2002 and has more than 625 franchised locations in 42 states.

But when Brown inquired about purchasing her own franchise, she learned that all of the Arizona locations she was interested in were taken.

Locations in other states were available, but she didn't want to leave the Valley.

"I was disappointed," she said. "But then I thought, 'Somebody else has got to be doing this.'" Hand & Stone Brown researched further. She went on the Internet and discovered that a number of spa-franchise concepts were in the development stages. She was most impressed by Hand & Stone, based in Hamilton, N.J.

"Their concept was more like a spa than a clinic, and they really seemed to know what they were doing," she said.

She also was intrigued by Hand & Stone's signature hot-stone massages, which set the concept apart from the competition.

Hand & Stone offered a high degree of support to their franchisees, which particularly appealed to Brown, who had little experience running a business, let alone a day spa.

She was so taken with the concept that instead of buying just one franchise, she bought regional rights to develop the entire state. That includes opening or selling franchises for 23 locations.

"We cashed in our retirement plans and jumped in," she said.

On the ground Brown and Papanikolas were Hand & Stone's first franchisees and first regional-franchise developers. Hand & Stone has 32 locations in eight states and 15 more under construction.

Brown opened a signature franchise location near 87th Street and Raintree Drive in Scottsdale, and she has sold franchises in Phoenix, Anthem, Goodyear and Ahwatukee Foothills.

"The recession set us back, but basically we're doing OK," she said.

The business has become a family affair. Brown's son, Mitch, manages the Scottsdale spa.

Brown acknowledges that the business has turned out to be a lot more work than she expected. She's running her own franchise, plus acting as an intermediary between the corporate office and the franchisees she has brought on board.

"It's been a learning experience," she said. "I didn't know anything about this business, other than it seemed like a nice business to own." Brown had sales and marketing experience but quickly found that dealing with consumers was different from dealing with the technical engineers she called on as a manufacturer's rep.

But the Hand & Stone corporate staff members have been there for her every step of the way, she said. They helped her select a location and design her spa, and guided her in the hiring of massage therapists and then aestheticians when the company added facials and body waxing to its list of services. They've helped her with marketing support and last year's expansion into skin treatments.

Brown has been particularly pleased with the fact that the company has been progressive about adding new services.

"We're really evolving into a full-service spa," she said.

Brown grew up in upstate New York, but her family moved to Phoenix for her senior year in high school. The change was too much for her, and she persuaded her parents to let her return to New York to finish high school with her friends. After college, she worked as a buyer for IBM in New York and later worked for electronics companies in Boston and Chicago. Her employer in Chicago bought a company in Phoenix, and she found herself making regular business trips to the Valley.

During one of the trips, 10 years ago, she met her husband and decided to move to Phoenix.

"The weather was a lot better than Chicago," she said.

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