Spa franchise Hand & Stone continues to expand since moving corporate offices in Hamilton

By Mike Davis/The Times 
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on February 16, 2014 at 7:10 AM

HAMILTON — They started out in towns near the Jersey Shore, small day spas offering massages to people on the go.

Within a few years, they’d become hot spots in the New York and Philadelphia markets.

Now, there are nearly 150 Hand & Stone locations throughout the United States and Canada. Like many other businesses looking to spread their name far and wide, Hand & Stone operates as a franchise business, allowing individual investors to own and operate one or more stores.

“Using a franchise model for development of a brand is tremendous for a business with low capital,” Hand & Stone president and chief executive officer Todd Leff said last week. “You have franchisees use their capital to help grow the distribution and breadth of the brand.”

“And of course, they profit from that. It’s their own business,” Leff said.

In 2005, chief operating officer John Marco founded Hand & Stone in Toms River after years as a physical therapist. Within five years, the business expanded to more than 40 franchise locations and has more than tripled that number since then, operating 145 locations.

Leff, who became CEO in 2010 after working as CEO for Cottman and AAMCO Transmissions, attributed the success to a changing business model to attract a changing customer base. As the job market went south, Leff said, the company switched from a long-term membership contract to smaller month-to-month commitments and began offering simple day services, such as facials and waxing. Facials quickly became the fastest growing sector of Hand & Stone’s business, Leff said.

“We positioned the brand as a health and wellness business,” Leff said. “People wouldn’t spend $2,000 or $3,000 on a vacation where they could get a massage, but they might spend $50 or $60 on health and wellness. We had to make adjustments.”

Continued strategic growth is the goal in the future, Leff said. He projected between 50 and 60 new spas to open up each year but only with thoroughly vetted franchisees and in areas prime for growth.

New Jersey has been one of the fastest growing markets for Hand & Stone, which hit more than $90 million in sales in 2013, but the brand also has taken off in Houston, Dallas, Denver and south Florida.

But it takes a lot of scouting before opening up in new markets, Leff said. For example, before committing to bringing Hand & Stone to the Atlanta area, the company will seek a franchisee willing to open between five and 10 locations. With multiple locations, the company can advertise on television and ensure viewers have a Hand & Stone within driving distance.

“It’s hard to support locations that are far out in the field and we need to have a concentration of stores in any given TV market,” Leff said.

In 2015, the business could grow even more with the help of a $10 million “franchise fund” from Benetrends, a firm that provides loans and consults with small business owners on how to develop or expand their business and how to fund it.

The “franchise funding” will streamline the process for franchisees looking to open a Hand & Stone location, having already pre-approved the Hand & Stone product and business model.

“One of the biggest concerns of people deciding whether to buy a franchise is having sufficient capital and getting funded,” Leff said.

“This takes a lot of the worry away from them. If the candidate meets some pretty objective requirements, they’re basically guaranteed funding. That takes a lot of the guesswork out of the process and a lot of fear away from the franchisees.”

Contact Mike Davis at (609) 989-5708 or mdavis@njtimes.com.

http://www.nj.com/mercer/index.ssf/2014/02/spa_franchise_hand_stone_continues_to_expand_since_moving_corporate_offices_in_hamilton.html 

Porter Ranch Grand Opening

Congrats to our Porter Ranch location and their very successful Grand Opening over the weekend!! If you're in the are come visit us or call (818) 366-8866 for more information. The owners, Henry and Sheryl Mandell have a fantastic story of how they came to Hand & Stone Massage and Facial Spa, and have great plans for the community.

 Henry Mandell, 57, joins Hand & Stone with over 30 years of experience in executive-level positions in the apparel, technology licensing, entertainment and consumer products industries. Among his vast experience in entrepreneurial environments, Henry affected a turnaround as CEO at a Silicon Valley technology company, and served as President of Ed Hardy from 2006-2008, growing the brand from a 15 million dollar business to 275 million over the time that he managed the company. In 2008, Henry became a partner of a financial consulting company, stabilizing companies that were experiencing a crisis during the economic downturn. Currently, he is the general manager and CFO of U-PIC Insurance Services.

Henry grew up in New York and received a business degree from Syracuse University in 1978. He also received an MBA from San Jose University in 2003, earned mid-career at night.

Henry met his wife, Sheryl, a Los Angeles native, when he moved to California to work at Twentieth Century Fox in 1981. Before leaving the work force to take care of their two children, Sheryl worked as a mortgage loan processor. When she returned to work, she found her true passion in the catering business, which she has since worked in for the past 15 years as a consultant. This experience has equipped her with the customer service skills needed to run a Hand & Stone spa.

Henry will continue working full time at the insurance agency, and will be charged with managing the financial side of the business while Sheryl will be the hands-on owner of the spa. This is the first Hand & Stone located in Los Angeles.

How did you learn about Hand and Stone?

I decided early this year that I wanted to properly investigate franchises so I hired a franchise broker. Based on our strengths, interests and financial expectations, he pitched various opportunities to us, including Hand & Stone.  My wife was interested in the concept and felt that her skills would be transferrable on the customer service side. I saw it as a growing company in a market experiencing strong growth. It’s a business that can’t be outsourced or made obsolete by technology.

Why is it poised for success in LA?

People in LA are concerned about health, wellness, looking and feeling good. There’s a strong demographic in Porter Ranch area in terms of its income and population, while the psychographic profile matches perfectly with the target market for Hand & Stone. It’s a mature area where there are longtime home owners, it’s an upper middle class area, and there is disposable income. We’ve already received strong feedback from people in the neighborhood and have sold memberships pre-opening.

What are your development plans? End goal?

We will be developing three franchises, with the first in Porter Ranch, in the north San Fernando Valley and then two more over the next three years. We have the East Ventura County and West San Fernando Valley territories.

How many jobs will you be adding to the area?

I will be adding at least 10 jobs initially, and eventually getting up to at least 50. I plan to be a job creator.