Russ: This is The BusinessMakers show heard here and seen online at TheBusinessMakers.com. It's guest time on the show, and I'm very pleased to have with me Glenn Franson, cofounder, president and CEO of Massage Heights. Glenn, welcome to The BusinessMakers Show.

Glenn: Well, thank you for having me on, Russ.

Russ: You bet. Well, let's start by you telling us about Massage Heights.

Glenn: Well, Massage Heights was founded in San Antonio, Texas in 2004. We founded the company to be able to offer, to massage recipients, the many benefits - the health benefits associated with it. We've done this by using a unique membership format which allows people to come in more frequently and take advantage of the health benefits.

At the same time, it keeps it cost effective, convenient, and it fits into everybody's lifestyle.

Russ: Okay. Now, is this, I'm assuming, multiple locations?

Glenn: That's correct. We have currently about 74 operating locations in 22 states. Plus, there's four in Canada. We have great presence here in Texas with eight retreats in San Antonio. We've got 13 in the Houston market, additional four in Austin, and six in the Dallas market as well.

So we're a Texas based company, but we are quickly growing across the nation.

Russ: Okay. Now it would seem logical to me that somebody that's opening up and operating a business like that would maybe have a background in the whole massage, therapeutic massage area. Is that correct?

Glenn: Well, actually, our very first franchisee was a massage therapist. She also had an education from a local business school, and she wanted to get into the business. And this is why we've decided to franchise the business so that we could bring more people in, expand the brand with people that are passionate about massage services.

Today, what we're looking for in a franchisee or strategic partners, as we like to call them, is someone with a business background particularly with some experience in sales and marketing.

Russ: Okay but so, prior to this Massage Heights, you were not in the massage business?

Glenn: I was not. I'm an entrepreneur.

Russ: Okay.

Glenn: I've been in many other types of businesses, and I saw this as a perfect opportunity. It came at a great time and really saw a need for people to be able to relieve their stress and their anxiety and to be able to find an outlet for the aches and pains.

I can certainly associate with that. I've had some back pain over the years.

Russ: Right.

Glenn: And massage has worked wonders for myself.

Russ: Right, great. Well, describe the typical store, the typical Massage Heights retail establishment.

Glenn: Well, it's really calming environment. It's kind of hip, kind of cool, kind of trendy. At the same time, very relaxing, soothing colors, wonderful aromas, soft lights and candles, soft music as well. It's not a clinical atmosphere environment. It's very spa like.

The model is also set up for us to be able to do up to about 100 appointments per day per location. So we are doing a lot of volume, but at the same time, we're keeping the quality there, the same type of quality that you would have had a five star resort.

Russ: Wow. So 100 a day. What sort of staff does it take to do that? How many masseuse do you have to do that?

Glenn: Sure. Well, typically, there are about 20 to 25 full and part time massage therapists at each location. The average retreat will have ten to 12 treatment rooms. So we typically keep about that many staff members on each shift.

An average retreat, we'll see as many as 3,000 appointment times per month. On average, probably closer to about 1,500.

Russ: Wow. That's impressive for sure. So is it hard to find that many people that are qualified to give a therapeutic massage?

Glenn: Well, actually, it's not, and that's a great question. The industry trade statistics state that 70 percent of massage therapists are independent contractors, and that has been the norm for many, many years.

So, when a person gets out of school after doing 500 to 1,500 hours, they need to open up their own business. They need to have operating capital. They have to know how to market the business. They have to keep the books. They really have to become a business owner.

Russ: Right.

Glenn: It becomes very challenging.

Russ: Right.

Glenn: So what we've done is we've actually created employment opportunity. Instead of becoming an independent contractor, they can become an employee with benefits, healthcare, 401K, et cetera. They bring their hand, and they bring their heart, and we do all the rest for them.

We do all the scheduling, all the marketing, all the bookkeeping, and really, they come in and do what they love to do best, and we take care of all the hard stuff.

Russ: Oh, okay. That sounds like it makes business sense. Now, you know, I'm under the impression - maybe wrongfully so - that a massage therapist can only do so many of these performances in a day because they get worn out and tired. Is that right?

Glenn: Well, if you're like me, after giving your wife a massage, after about three to five minutes, you're pretty exhausted. Am I correct?

Russ: Right, right.

Glenn: Exactly. Well, our average therapist will actually do anywhere between three and five massages on a six hour shift.

Russ: Okay.

Glenn: And the reason they're able to do that many is that they're trained to work smart in an ergonomic environment. We've created a very ergonomic work environment for them with putting in anti-fatigue flooring as well as electric lift tables so that they're working at the proper angles.

Russ: Okay.

Glenn: And we also give them some education on how to work smart so that they can extend the life cycle of their career. We've also created some additional services that we call elevations to actually elevate the surface. Things like hot stones that actually have therapeutic benefit yet, at the same time, allow the massage therapist to utilize the pressure of the stones and the heat of the stones without having to spend the whole hour really applying a lot of pressure.

So that's helpful to them, and it's also helpful to the client, and that helps them maintain their longevity in this career.

Russ: Okay. Now, if I were a customer, I mean you mentioned it - and how did you describe - it's kind of like a membership that I would actually sign up for. Does that mean I can't go in and just get a single, one day, 45 minute massage?

Glenn: Well, you certainly can just come in and take advantage of a massage anytime you'd like.

Russ: Right.

Glenn: We've created this membership. It's 49.99 per month and then, every single month, the member gets a one hour massage that's included for that rate.

Russ: Okay.

Glenn: So, really, all they're committing to us is to come in one time, once a month and come in and relax for the -

Russ: Okay.

Glenn: 49.99. Each time that they wish to come back during that month, they pay only 39.99 for additional one hour massages.

Russ: Okay.

Glenn: Some people come in as many as two and three times per week, but the average member is coming about one and half visits per month. Now everybody can come in the very first time at the member rate of $40.00 to try it out, and if you decide not to become a member then, you can certainly come back at the nonmember rate which is $80.00 which is just about what you're going to pay anywhere.

So, ultimately, we're just incentivizing our members with the 50 percent discount to give us a commitment.

Russ: Okay. Now this business work like a barbershop or a hair salon where, you know, once I go in and I really like it and I want to come back two or three times a week, I want to stick with the same therapist every time, or do some of them not care?

Glenn: Well, you know, it's interesting because we do have so many therapists. Typically, a first time customer will come in, and they'll fall in love with their therapist.

Russ: Right.

Glenn: And say, "I don't want anybody else other than that therapist."

Russ: Right, right.

Glenn: We quickly educate them that we have 20 to 25 therapists.

Russ: Right, right.

Glenn: They have different needs at different times - the customer will.

Russ: Right, right.

Glenn: And that they're all very talented and all very extraordinarily different. So we've had a really great retention rate with our employees because we have created this environment where they can really thrive and succeed.

Russ: Right.

Glenn: So it is easy to come back in and request the same individual, but part of our business model is making it very convenient. Convenient means that, if you get an extra hour on your lunch break or you wake up with a headache or you have a stiff neck at the end of the day, that you can walk right in or call ahead.

So, given those circumstances, you can't imagine that, if you just walk in off the street and say, "I'd like to get a massage with Gina today."

Russ: Right.

Glenn: That she might be available. We try to train our members that they should have a backup, at least one or two people that they like to see on a regular basis in the event their regular therapist is busy.

Russ: Right, okay. Talking with Glenn Franson, cofounder, president and CEO of Massage Heights, and we'll be back with more with Glenn after this. You're listening to The BusinessMakers Show heard here and seen online at TheBusinessMakers.com.

[Commercial]

Russ: This is TheBusinessMakers Show heard here and seen online at TheBusinessMakers.com and continuing on with Glenn Franson, cofounder, president and CEO of Massage Heights. Now, you mentioned you have how many locations now?

Glenn: In about 75, 76 operating plus four in Canada.

Russ: Okay, okay, okay. So are you one of the biggest in the country now that's doing this?

Glenn: Well, we're one of the biggest. We are not the biggest.

Russ: Right.

Glenn: We've emulated the model of the national competitor who came out several years before us. Really did a great job of blazing the trails and bringing massage to the masses.

Russ: Okay.

Glenn: Really, the differences are not the subtle. The membership model is the same. However, the environment is totally different.

Russ: Okay.

Glenn: We had the fortunate opportunity of being second to market.

Russ: Right.

Glenn: And being able to emulate the things that they did that were very positive and improve in some areas that we thought we could. That includes the environment that we created for our guests.

Russ: Okay. Now are all 74 locations franchises?

Glenn: No. We have three corporate units where we -

Russ: Okay.

Glenn: Typically do the R and D and we test new products and services.

Russ: Right.

Glenn: And really try to stay in tune with the frontlines.

Russ: Okay.

Glenn: And then the rest of the units are franchised.

Russ: Okay and you mentioned you have an entrepreneurial background. Did you ever do anything related to a franchise model previously?

Glenn: I had not. I had been in the restaurant business and also in the manufacturing business.

Russ: Okay.

Glenn: And each of those have a very long story associated with it.

Russ: Right.

Glenn: As how I got involved much like this. I saw an opportunity, wanted to try something new, and I just went for it.

Russ: Okay.

Glenn: Previous to that, I was in the health club business. So this is really kind of up my alley.

Russ: Okay, okay.

Glenn: With health and wellness and, of course membership.

Russ: Okay. Well, I mean but franchising is, from my understanding, is a fairly complex, arduous process with lots of rules and regulations.

Glenn: Yes.

Russ: Maybe I'm out of date, but is that still accurate?

Glenn: Well, totally accurate.

Russ: Okay

Glenn: But understated, in fact.

Russ: Okay.

Glenn: It is an entity in its own. It's a business in its own that you have to learn to operate.

Russ: Right.

Glenn: So we're not just learning to operate and teach people how to operate these retreats.

Russ: Right, right.

Glenn: We're learning how to be franchisors.

Russ: Right.

Glenn: And it is a very long process. It's not something that one does inside of a couple of years.

Russ: Right.

Glenn: Even today, seven years into it, we're still learning how to effectively communicate. The major difference is really between franchising and owning your own corporate units is -

Russ: Right

Glenn: Is that you have these people with a vested interest -

Russ: Right.

Glenn: Who essentially are entrepreneurs as well.

Russ: Right.

Glenn: They have the entrepreneurial spirit.

Russ: Right.

Glenn: So you have to approach things differently if you don't care for the way that the brand is represented, but it is a very, very expensive, very arduous task, and it is an ongoing task.

Russ: Right.

Glenn: And lots of guidelines, regulations not only state but federal and we're regulated, as you know, by the Federal Trade Commission.

Russ: Right and being relatively new in the process, I'm certain you will have some mistakes every once in a while or somebody bought one that shouldn't have bought one and can't operate it. Is that right?

Glenn: Well, I think that was first what came to my mind when you said mistakes.

Russ: Right.

Glenn: In business, we learn lessons every day, things we could do better.

Russ: Right, right.

Glenn: The biggest mistake I think that we've made is thinking that this was very simple.

Russ: Right.

Glenn: Because it was simple to us.

Russ: Right, right.

Glenn: We thought that we could just teach anybody to do this.

Russ: Right, right.

Glenn: It's so simple, and what we quickly learned was, no matter how bad you want to grow, you have to find the right people.

Russ: Right.

Glenn: With the right backgrounds that are committed and just as committed as you are to being in those retreats.

Russ: Right and it goes without saying I'm sure that the first few that you try to sell, you have to be able to demonstrate that operating these things can happen successfully with a cash flow positive scenario and be very profitable. Right?

Glenn: Well, absolutely.

Russ: Yeah.

Glenn: That's why people invest in franchises.

Russ: Yeah, right, right.

Glenn: They want the model handed to them.

Russ: Right.

Glenn: But they want to know that, if the follow the model, it's going to be successful.

Russ: Right, right, right and so I would assume, in this structure, that a new franchisee comes in and pays a franchise upfront fee. Plus, they pay a royalty fee. Plus the might pay a marketing and advertising fee, and then they - they have to prove to you, I assume, that they can build out the space as well and open and operate.

Do you provide any financing along the way to help them with that?

Glenn: We don't. Although, we do have contacts. We've been able to get a number of people financed, and in this day and age, that's a very challenge task.

Russ: Right. Yes, it is.

Glenn: So we found some creative ways that we can help get that done, but we get a lot of support from real estate site selection to the build out process. We have really a retreat development package that comes on a truck, and we roll it out inside one day after the retreat is built.

We provide about 15 days of training prior to opening, and so there's a lot of support along the way. It really is a, I think, a relationship that is based on communication, trust and then also continuing education.

Russ: Oh, yeah. Absolutely. So help us understand what's the long term picture. What's the vision for Massage Heights?

Glenn: Well, as I said, we currently have four open in Canada. We have some great partners up there. We also have some international interest abroad which may occur in the near future for us.

Russ: Right.

Glenn: We're really focused, right now, on building some critical mass within these markets that we're already in. As I said, there are 22 states, and we'd like to fill in the gaps.

Russ: Right.

Glenn: Long term, I can't see myself exiting anytime within the next ten years. We're having such a great time doing it. There's still so much to do, but ultimately, we want to have about 1,600 units in the United States alone. We feel like we can do that. We feel like it's going to take us about another five years to get there.

Russ: Really? Cool. So I have to ask you this though. You already mentioned your other entrepreneurial endeavors. You mentioned restaurants, manufacturing and health club. Give us a brief overview of those. What is it about you that made you want to take that path?

Glenn: Well, you know, it's something that's just innate. It's within. My father was an entrepreneur. My grandfather was an entrepreneur, and recently, I did a little bit of searching on the internet on one of these popular sites and did a little bit of genealogy work.

And I found that there are actually six generations of Fransons, many that have been named Glenn, by the way.

Russ: Okay.

Glenn: To come into the United States from Norway.

Russ: Okay.

Glenn: And all six had been entrepreneurs. I didn't realize that until recently.

Russ: Wow, wow.

Glenn: Now, of the six, I think, at this point, I have possibly the brightest future.

Russ: Okay.

Glenn: But they were all good family men, hard workers and operated small businesses pretty much. So I think it's just in my DNA. Yeah.

Russ: Okay. Real cool. So, before I let you go Glenn, let's imagine that there's like a young, inspiring entrepreneur watching you right now.

Glenn: Sure.

Russ: Saying, "That is so cool. He's got this thing really well in 74 locations." What kind of just general advice would you give him or her if they started thinking, "Man, I want to take that path?"

Glenn: Yeah. Well, you know, I can give you so much advice, and just to sum it up very quickly, I love to give advice to young entrepreneurs. It's what makes me thrive. Hopefully, one day, in my philanthropic efforts, I'll be able to really help young entrepreneurs, but I have to say you have to go with your gut.

You have to be prepared to take a lot of punches. Be prepared to make sacrifices. It doesn't come without the sacrifices. Something is going to give, and it is within your control to determine what areas of your life you may want to scale back to be able to give everything you need to give the business. It takes a lot of hard work. There's no substitution for hard work.

But go with your gut. Surround yourself by the best people you can. I think the wisest thing you can do is realize that you're not an expert in everything, and that you will be most successful if you bring in people that are experts in particular areas and surround yourself with people that literally know more than you do.

Russ: Well, Glenn, I appreciate you sharing that as well as the whole story about Massage Heights.

Glenn: Sure. Well, thank you. I appreciate it. Thank you for having me on.

Russ: You bet. That's Glenn Franson, cofounder, president and CEO of Massage Heights, and you've been listening to the The BusinessMakers Show heard here and see online at TheBusinessMakers.com.