Can You Really Have a Spa Treatment at Blockbuster Video?

by Todd Leff, CEO of Hand & Stone

When we meet with new prospects looking to open their own Hand & Stone Massage and Facial Spa the discussion invariably turns to real estate, which I believe to be for several reasons:

1) People know the old adage in retail that its location, location, location.
2) Because they do not yet fully understand the business model they focus on what they have had some experience with and often times that is real estate.

What prospects most want to do after they meet with us is “drive the market.” Having been in franchising for more than 20 years, I can tell you that is the worst possible next step.

First, it takes the prospect away from the real questions they should be researching, such as is this the right industry; is this the right business model; can I work with this management team? Second, you will quickly get discouraged because when you drive around you do not see the perfect opportunity waiting there.

This week I started looking for our new corporate spa location and would suggest a more rational approach. We started with identifying the right markets, plotted the competition, and did our demographic studies. We then engaged our real estate tenant broker representative to do the research in the market to find us the right property. He knows our business and he knows everyone in the market.

As we drove around looking at the opportunities in the area, I was struck by the fact that four of the seven properties I looked at were not even “on the market” or vacant. In some instances the tenant in place was moving, some were being moved out and in one they were dividing the property. I had to be very discrete in looking at two of the spaces because they were currently operating fast food establishments.

At the end of the day, our best prospect is a Blockbuster Video where the landlord wants to divide it into two spaces. Great space, great shopping center, and the public never knew it was on the market. In another market we are converting a Quiznos into a Hand and Stone – and no sign ever went up on the property nor was it ever vacant.

When I was CEO of Cottman Transmission, one of our best locations was converted from a former IHOP to a car repair facility. No one could have seen that “just driving the market.”

So my advice to prospective franchisees: Make a decision you want to be in the business, that it’s the right industry, and then engage the franchisor and their professionals to help you find the right property. It takes imagination, contacts, and research to get the right real estate deal and sometimes they come from the oddest places.