The spa industry encompasses businesses that offer a wide range of relaxation and wellness services, mostly massages, facials, and body treatments. The spa industry is distinct from the beauty salon industry in that while these two types of service businesses may often be located at the same operation, spas are more gender neutral and offer services that are less aesthetic but wellness oriented. While spas do offer massages as one of their primary services, they are different from massage centers in that they offer a wider range of services. Furthermore, there is great diversity in the types of companies that offer spa services, examples including day spas, hotel spas, and resorts. The market is highly fragmented with no major businesses occupying more than 5% of the market share.
As the COVID-19 pandemic shut down all nonessential businesses, businesses in the beauty and health industry were not left unscathed. As these nonessential businesses were allowed to resume business with reopening of the economy, stringent health guidelines regarding masks and social distancing limited the amount of customers that these businesses could serve, a blow to already razor thin margins. But before the pandemic, a growing economy and rise in discretionary spending allowed for this industry to expand magnificently, with more consumers opting to choose high-end, quality services for more money than try to save money on these types of luxury services. Furthermore, trends in “self-care” and the rising prominence of the health and wellness industry generated renewed interest in these types of services. As the pandemic subsides, the economy begins to recover, and household income levels continue to rise, the industry is expected to rebound.
The Paid-in-Full Rate is when the SBA loan is fully paid off by the small business owner including interest, indicating financial strength.
The Charged Off Rate is the SBA loan default rate where loans have no confidence in being paid off by the small business owner.
For every 9 SBA loans fully paid including interest, 1 SBA loan was unable to be paid back, or defaulted.
-SBA Loan Data from 2010-2019
-Non-Franchise Businesses taken into account: 11,687
Before the pandemic, spas were a booming industry as low unemployment across the board correlated with higher stress levels and a corresponding need for self-care. Similar to the beauty and health industry overall, increased emphasis on the importance of health and wellness correspondingly boosted the spa industry. However, the advent of a pandemic led to a sharp decline in revenue for the spa industry, approximately 7.7% in 2020 alone. Even as nonessential businesses began to open up, many spas remained closed as the nature of the services offered were contrary to mask wearing and social distancing. As a result, many operators in the spa industry were forced to permanently leave. Despite the immense struggles of this industry due to the pandemic, the industry as a whole is expected to experience a rebound in growth, with new businesses replacing failed businesses. Furthermore, spas that take advantage of rising interest from men and consequently tailor their services and marketing as such are expected to do well.
Average Beauty Franchise Industry Percentage Fees
Standard Beauty Franchise Industry Investment
This metric is the standard industry investment amount for a single unit franchise investment in this industry. Our research and analytics team analyzed over 98 franchise concept investment breakdowns in order to calculate this figure.
The Paid-in-Full Rate is when the SBA loan is fully paid off by the franchisee including interest, indicating financial strength.
The Charged Off Rate is the SBA loan default rate where loans have no confidence in being paid off by the franchisee.
For every 16 SBA franchise loans fully paid including interest, 1 SBA loan was unable to be paid back, or defaulted.
-SBA Loan Data from 2010-2019
-Franchise Businesses taken into account: 3,275
Learn more about the Health & Beauty Industry
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