What do chicken wings, magnetic signs, garbage collection, pet food and massage all have in common? They are all products or services offered by franchises that are owned by Roark Capital Group of Atlanta, Georgia. This company has invested $3 Billion Dollars in collections of franchises across the US and around the world. Their latest acquisiiton is the chain of more than 800 Massage Envy locations, which has brought massage to the masses, and is now grossing about $1 Billion Dollars per year.
Massage Envy has often been referred to as the McDonald’s of massage. Actually, we have to leave McDonald’s out, but we can include Arby’s, Cinnabon, Carvel Ice Cream, Auntie Anne’s (the pretzel people), Schlotzsky’s, WingStop, Seattle’s Best, McFornaio, McAlistar’s Deli, Moe’s Southwest Grill, and the Corner Bakery.
Along with all these food venues, Roark also owns the Atkins diet brand–I guess after you get fat on all the fast food, they’re ready to slim you down with the diet stuff–as well as pet stores, several garbage pickup companies, a truck washing company, and more.
I have come to the defense of Massage Envy many times. They provide employment for about 16,000 massage therapists, many of whom are students fresh out of school. I know many therapists who have or are currently working there; some are satisfied and some are hoping for something better to come along. Like any franchise, some owners are better than others, and employee satisfaction, at least among those people in my networks, seems to depend a lot on the business ethics and integrity of the owner.
Just for your edification, here’s a little history of the company. ME founder John Leonesio created a chain of health clubs which he sold to 24 Hour Fitness in 1999. He took the money from that sale and adapted the health club membership concept for massage therapy. In 2008, he sold out to The Essel Group, a multi-national conglomerate based in India. Just two years later, Essel sold ME to Sentinel Capital Partners (owners of groups of Taco Bell, Pizza Hut and Cottman Transmission franchises) — and now the franchise network is owned by Roark Capital Group. It’s just life on the food chain of capitalism.
In just two years, the average per-location gross revenue of a Massage Envy franchise increased more than 50% — from $815,000/year in 2009 to $1.25M in 2011. Did the earnings of the massage therapists employed at these franchises go up 50% during the same period? I seriously doubt it. The ones who are making the big money off massage are the Massage Envy franchise owners; the regional developers (those who own the rights to operate franchises in each state); the Massage Envy corporate HQ in Scottsdale, Arizona; and now the investors at Roark Capital.
It seems like everything in the world is franchised these days…everything from cleaning services to florists to funeral homes and even medical care. I suspect we can’t expect massage therapy to be any different, but still, it’s kind of sad to see such a personal service turned into just another link on the corporate chain. I’ll take an order of wings with that massage, please, and pass me a Cinnabon for dessert.