ENTREPRENEUR’S FRANCHISED SPA CONCEPT HAS PROMISE OF BEING A HANDS-DOWN WINNER

(Roslyn Heights, NY)—- John Marco’s entrepreneurial career began when he was only seven years old with a lemonade stand in front of his home. Every kid has at least one lemonade stand, but that’s where Marco was different. When sales were brisk he wasn’t thinking, “I need to make more lemonade.” He was thinking, “I need more locations!”

“Except my CEO mom said I couldn’t open another one any further than 50 feet from our front door. So I took some notes and planned for my next venture,” said a laughing Marco, recalling his first attempt at multi-unit operations.

Marco must have scribbled some insightful notes, because 44 years later the 51-year-old Marco has embarked on another business venture with the opportunity for spectacular growth. But this time the boundaries don’t end at his parents’ property line.

Marco is the founder and CEO of Hand and Stone Massage Spas, a franchised spa concept that offers convenient, affordable, top-quality massage services. Hand and Stone Massage Spas offer consumers flexible hours, low introductory pricing and low-cost membership programs with incentives for repeat business. The locations themselves augment the experience, with relaxing stone waterfalls, subdued lighting and comfortable, contemporary furnishings. Introductory prices for first-time visitors start at $39.95 for a full-body therapeutic Relaxation Massage.

The first Hand and Stone Massage Spa opened in Toms River, NJ, in November 2004. It was followed a year later by one in Spring Lake Heights, NJ, and a third this past June in Scottsdale, AZ.

By the end of the 2008, the company expects to have 100 locations under development and to be sold out of regional development opportunities nationwide. Already, six additional franchises have been awarded in Arizona, two in Northern California and one each in Tennessee, Florida and New Jersey. Marco’s goal is to have 300 to 500 locations open by 2010.

Marco’s background is fitting, having spent 23 years as a physical therapist in private practice in Toms River, N.J. While he saw firsthand the spectacular growth of the $10-billion-a-year massage industry, he also saw that it remained fragmented and without recognizable brands. Marco recognized the market’s need for reliable, top-quality massage services at affordable prices.

“I saw the acceptance of massage therapy in hospitals and some major health plans. Massage therapy was clearly becoming mainstream in America,” said Marco, who had been closely monitoring the rapid growth of massage therapy since 1996. “I knew I could have a tremendous influence on its further growth and acceptance.”

Indeed, massage is ripe for franchising. According to industry sources, Americans purchase more than 100 million massages each year. Two million more people received massages in 2006 than in 2005.

The phenomenon spans all age groups: approximately 48 percent of 18 to 24-year-olds have had a massage and the use of massage among those 65 and older has tripled since 1997. In addition, a reported 14 percent of all Fortune 500 companies now offer massages as an employee benefit.

The graying of America, a greater consumer willingness to indulge one’s self and increased awareness of the emotional and physical benefits of massage have all contributed to its fast-track growth.

So when Marco opened the doors to the first Hand and Stone Massage Spa on Nov. 20, 2004, it should have come as no surprise that the spa did more than $5,000 in business on its first day. One customer lived two hours away but said that wouldn’t keep her from returning. Another said it was “the best thing to ever happen to me.”

“People were amazed they could receive such a great massage at such a low price,” Marco said. “Massages have come a long way from only being a luxury for the rich and famous. The physical benefits are for real. Nothing is stronger than direct human touch that nurtures, not to mention that it is now affordable and available seven days a week.”

The estimated initial investment in a Hand and Stone Massage Spa ranges from $189,000 to $389,000, depending on location. Spas average 2,500 square feet in size and are typically located in suburban shopping centers and strip malls. Franchisees enjoy all the benefits of operating a retail business without many of the inherent hassles.

“It’s a service business with low inventory and professional employees,” said Ken Stein, CBI, M&AMI, a Hand and Stone development manager, who added that all of Hand and Stone’s massage therapists are certified and licensed to meet all local requirements. “You have a feel- good business; people want to come back to you to receive the benefit of having a massage and your employees are happy to work there.”

Growth is expected to come from a combination of single and multi-unit operators and regional development. Regional developers are granted an exclusive territory and are required to build and operate at least one unit within their region, in addition to developing their network by selling and supporting additional franchisees in their territory.

Stein said it is an ideal opportunity for individuals with business or corporate experience looking for a career and/or lifestyle change.

“The opportunity appeals most to people who understand that the industry is exploding,” Stein said. “These individuals really want to help people and see a tremendous financial reward by getting into it with a company like Hand and Stone that is growing quickly as a national franchisor. Plus, you have a membership-based business, so you’re getting that money every single month.”

Making the transition from physical therapist in private practice to CEO of a national franchisor has been an easy one for Marco, again owing to his entrepreneurial history and prowess.

He and a partner ran a successful retail vacuum business in a busy shopping center when he was only 19. But when Marco wanted to add more locations – he never forgot the lemonade stand experience! - his partner balked. Marco sold his $1,500 initial investment to his partner for $22,500 and entered college to become a physical therapist.

In the late 1980s, Marco was at it again, developing a home movie-making product that sold in stores such as Macy’s and as far away as the United Kingdom. He found himself being interviewed on CNBC as the CEO of an upstart business.

So, while Marco’s customers find comfort today in the relaxing hands of Hand and Stone massage therapists, Marco is equally comfortable leading a fast-growing franchise.

“My business experience and people skills helped me to be a success as a physical therapist in private practice; Leading Hands and Stone is no different. It’s a natural for me,” Marco said. “We know we can deliver the best massage experience at the best price and franchising is the best vehicle to accomplish that objective. To me, franchising is an extended family that just keeps growing.”