State of the state: Retail/Consumer
The massage industry has seen 15 percent growth over the past three years and now generates annual sales of $12 billion. The skin care industry is also made its beauty mark, generating $18.7 billion in revenues in 2007 and projected to grow by 40 percent next year.
Erik Bostrom, owner of Hand and Stone in Highlands Ranch and Colorado’s regional franchise developer, is capitalizing on the growth of the spa industry. Hand and Stone is a full-service day spa, and Bostrom’s location features 10 treatment rooms in a 3,000-square-foot facility.
“One of the real benefits we have with Hand and Stone is really delivering world-class spa services conveniently,” Bostrom said. “We have very affordable programs. Most of our clients see us monthly, and it’s less than $50 a month.”
Hand and Stone was started by John Marco, a physical therapist from New Jersey who noticed the trend of people leaning toward preventive health measures instead of reactive health care. Approximately two years after starting Hand and Stone, Marco partnered with Todd Leff, a franchise veteran.
“Marco has a very strong understanding of the operations piece, and I think pairing that with a franchise industry veteran will really help us to be positioned to grow,” Bostrom said.
Bostrom opened his store in December 2008. Before Hand and Stone, he worked with Hewlett-Packard for eight years and left that industry to pursue an entrepreneurial opportunity. He says the franchise support, growing spa industry and quality of life swayed him to franchise in this particular sector.
Bostrom says Hand and Stone is unique from competitors because of its growing national reach: Hand and Stone has locations in 12 states and Canada. Economies of scale enable Hand and Stone to accommodate a large number of services — by building facilities with plumbing in every room, for instance.
In addition to being a franchisee, Bostrom is a regional developer in Colorado. His role is to recruit other franchisees and support them to grow their own Hand and Stone business.
“A lot of franchises have a corporate office and operations staff that visit every so often, but they don’t have somebody on the ground, who that can support them all the time,” Bostrom said.
The International Franchise Association estimates there are more than 900,000 franchised business establishments in the United States. These franchises are also estimated to provide 11 million jobs accounting for 8.1 percent of the private-sector work force. Overall, franchises supply more than 20 million jobs or 15.3 percent of the private-sector jobs and are responsible for more than $2 trillion in annual output.
Another franchise on the rise is Waxing the City. Robin Schoh, Waxing the City’s CEO, says its philosophy is doing one thing and doing it really well. Waxing the City came to fruition when the daughter of Marilyn Hartshorn, now Waxing the City’s chief financial officer, approached her about an exclusive waxing concept.
The daughter, Summer Hartshorn, brought her friend Alexandria Jimenez into the picture, and these women are responsible for the technical aspects of the waxing process. Together, they have worked in salons in Chicago, Minneapolis and Denver.
Schoh thinks their initial way of developing Waxing the City makes them feel they have been successful. The four founders listed pros and cons of their personal salon experiences and have modeled their business accordingly.
Schoh believes that the specializing in one service and the unique expertise of the founding members contribute to why they have been able to grow during the economic downturn. Waxing the City’s no tipping policy is a cornerstone of their business.
“If we do one thing really well, people come in comfortable and get a superior service and outstanding customer service, they walk out going ‘wow,” Schoh said. “We just want them to come in and get excellent service and a fair price.The best tip you can give us is to refer us to your family and friends.”
The company has five locations, four in Colorado and one in Texas. Waxing the City’s principals say they opened a store in Dallas because two of the 10 most populous cities in the country, Houston and San Antonio, are nearby.
“Dallas women are like no other when it comes to their commitment to health and beauty. It is over the top,” Schoh said. “It is a neat environment to work in.”