Hand and Stone Spa: Franchisees on Running a 'Toddler' and 'Infant' Massage Franchise

Wednesday, February 11, 2015

Debbie and Mike Gulledge's first franchise was in some ways their baby. The couple opened the Hand and Stone location while both continued to work corporate jobs. For a few years, everything was going smoothly - so smoothly, in fact, they were able to open a second location ahead of schedule. Then, the first location hit its "terrible twos." Here's what the franchisee duo has learned by running two different Hand and Stone locations at once.

Name: Debbie and Mike Gulledge Franchise owned: Hand and Stone in Tampa and Wesley Chapel, Fla.

How long have you owned a franchise? Over 3 years Why franchising? We wanted to own our own business, but we needed to have a solid foundation especially in this economy. We needed a proven successful model and experienced team who understood marketing and could help guide us in the right direction. The experts at Hand and Stone definitely gave us the necessary tools for success. While we were experienced in the business world, we didn't have the confidence to go forward with something we weren't as knowledgeable about without their support.

What were you doing before you became a franchise owner? Debbie: I was the director of marketing at Western Union Mike: I am still employed with a company as a consultant for the top 600 credit unions on credit card regulations, financial oversight and marketing.

Why did you choose this particular franchise? We loved the fact that it had an upscale look and feel but a reasonable price point for the everyday consumer. We also thought their business model was very sound and something that we agreed with.

When we originally began to look at franchises, we needed to be sure they had a strong foundation built on industry knowledge, excellent oversight and a reasonable growth plan. In this case, we were very impressed with the founder John Marco, his background and the team he'd assembled to carry out his vision, such as Todd Leff as president, who was really a perfect choice considering his background with franchises. We also thought the business model of a recurring membership base was especially important, but it also came with a built-in flexibility for the consumer, providing a month to month program. Finally, we were also pleased to learn that they had a veteran's program, as Debbie is a veteran and that gave us a very large discount on our initial franchise fee! How much would you estimate you spent before you were officially open for business? Category Expense (estimate) Franchise Fee $40,000 Leasehold Deposit $5,000 Buildout of Spa $225,000 Professional Fees $12,000 Insurance $6,000 Equipment $50,000 Retail Inventory $10,000 Furniture $5,000 Signage $7,500 Travel $2,500 Marketing $15,000 Recruitment/Training $4,000 Total $382,000 Where did you get most of your advice/do most of your research? We used the internet to start our research, but then we went out in the market place as a consumer and experienced certain brands that were available, talked to current franchise owners and met with Hand and Stone's regional developer for Florida, Rob Beers. We then attended a discovery day at their corporate headquarters in Hamilton, N.J. prior to deciding to move forward.

What were the most unexpected challenges of opening your franchise? In our case, we both were still working our corporate jobs and opening up a business at the same time. Evenings and weekends we worked at the spa for the first year before I (Debbie) was laid off. The next year was better with me being able to devote full-time attention to our business.

However, when we opened our second location in 2014, it was about a year sooner than we'd originally planned. That threw us back into the fray with trying to run one location and open another, especially with one of us still working in a corporate job.

The other challenge for us has been finding the right personnel. While we went approximately two years without too many personnel challenges, after opening up our second location we started having issues in our first. I call the first location our toddler and the second our infant, so while we were devoting more time and attention to our infant, the toddler started going through the terrible twos! That was definitely one of our biggest challenges, especially with only one person that could devote full-time to the day to day operations.

What advice do you have for individuals who want to own their own franchise? Do your homework, shore up your finances and expect it to cost you more than estimated. Even though corporate gave us an accurate forecast, we ran into a couple of unforeseen issues with our build-out that cost us more than anyone could anticipate. So, having a backup plan financially to be able to pull from as you start to open is very important. We had to tap into additional savings that we didn't think we'd have to use, but with the economy being very slow when we opened it took a little longer than originally estimated to get us to a necessary cash flow. However, with that being said, we did break even within 18 months of being open and experiencing double digit growth in a downturned economy wasn't bad. Also, despite our business background, it didn't mean that we really were the experts here. Recognizing that and using our resources, we met with other owners. Of course, the expertise from corporate was a huge aid to help us in the early days. We also appreciate that we can still use those resources today.

What's next for you and your business? Growth and stabilization. We still have more room to grow, but we also want to do it in a way that doesn't jeopardize our customer care but provides us with an income that will allow Mike to eventually leave his current position and allow us to work together on a daily basis. Ultimately, we wanted to go into business with each other because we love to work together and actually like each other - not everyone can work with a friend or family member - but we actually are looking forward to that more than anything else. Then one day, we are looking forward to being able to take our investment and retire and sail around the world!

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