Bottom line
- Total investment $719K – $1.1M including a $45K franchise fee, 6.0% ongoing royalty.
- Average unit revenue of $1.1M/year (median $1.1M).
- Rated STRONG with a risk score of 48/100. SBA loan default rate of 0.0% across 620 loans (below the industry average).
- 11 litigation matters disclosed in Item 3 — higher than typical. Review the summary for patterns (franchisor-initiated vs. franchisee-initiated).
Item 1 · who you're contracting with
The Franchisor
Yale framework · single-unit ROIC
Returns Analysis
Pulls Item 7 (investment) and Item 19 (revenue) from this brand's FDD into the Yale unlevered-ROIC formula. Override any input to stress-test it against your own assumptions.
The model · Yale framework
What would one Massage Envy unit return on the cash you put in?
Unlevered ROIC · per unit
24%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Massage Envy units return on equity?
Equity IRR · 5-yr
31.8%
3.97× MOIC
Year-1 DSCR
2.54×
EBITDA ÷ debt service
Equity required
$6.9M
on $17.1M purchase
Total debt
$10.1M
SBA $5.0M + senior + seller note
Overview
About
Franchisees operate massage and skincare service centers offering therapeutic massages, facials, and body treatments to subscription and walk-in customers. Day-to-day operations involve scheduling and managing licensed massage therapists and estheticians, handling membership billings and renewals, customer service, facility maintenance, and managing the operational complexity of a service-based business with significant staff turnover and regulatory compliance requirements.
Item 7 · what it costs
The Vitals
Item 19
Financial Performance
Item 20 · unit dynamics
The Growth Chart
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 5 states with active franchisees
The Territory Map
Derived from franchisee contact records. Shows states with at least one current operator — not where the franchisor is registered to sell new units (that data is re-extracting in a future refresh).
States derived from franchisee phone area codes (Item 20). Approximate — ported numbers may show the original state, not the franchisee's current location.
Government records
SBA Loan Data
Aggregated from SBA 7(a) loan disclosures, public data unique to FranchiseVerdict.
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Massage Envy presents high risk due to shrinking franchise network, pervasive litigation over billing and misconduct, undisclosed profitability metrics, and substantial capital requirements in a declining system.
Score breakdown · what drove the 48 / 100 rating
- 01MINORDeclining unit count (-4.2% YoY) signals system contraction and potential market saturation
- 02HIGHExtensive litigation involving membership billing practices, territorial disputes, and alleged misconduct by service providers creates legal and reputational risk
- 03MEDNet income not disclosed despite $1.14M average revenue — suggests thin or inconsistent margins that may not support the $719K-$1.08M investment
- 04MEDHigh initial investment ($719K-$1.08M) combined with 6% royalty leaves limited margin for error in a labor-intensive service business
- 05MINORNumerous customer lawsuits alleging provider misconduct indicate potential compliance and liability exposure for franchisees
- 06MED10-year term locks franchisees into commitment during period of system decline
Severity inferred from the FDD text · not a regulatory classification
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
Item 11
Training & Operations
Item 20
Franchisee Contacts
Phone numbers extracted directly from this brand's FDD Item 20. After purchase, you'll also receive a list of validation questions tailored to this brand.
Franchisee contacts
96 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Massage Envy · FDD (2025) PDF