Elements Massage
Initial Investment Range
$515,789 to $764,603
Franchise Fee
$91,774 to $98,774
Elements Therapeutic Massage, LLC, offers franchises for the operation of studios under the name “Elements Massage” offering various forms of therapeutic massage services, certain skincare services, and any related future services and products.
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Elements Massage March 31, 2025 FDD Risk Analysis
Free FDD Library AI Analysis Date: July 16, 2025
DISCLAIMER: Not Legal Advice - For Informational Purposes Only. Consult With Qualified Franchise Professionals.
Franchisor Stability Risks
Start HereDisclosure of Franchisor's Financial Instability
High Risk
Explanation
The franchisor explicitly flags its “Financial Condition” as a special risk. The financial statements in Exhibit E show very thin net income ($248k on $25M revenue in 2024) due to substantial interest expense. Note 7 reveals you are guaranteeing the parent company's $56M debt load under a joint and several liability agreement. This complex debt structure and low profitability may impact the franchisor's ability to support you or withstand financial shocks, posing a significant risk to your investment.
Potential Mitigations
- A franchise accountant must thoroughly review the franchisor's and its parent's financial statements, including all notes, to assess the true financial health and risks.
- It is critical to discuss the joint and several liability for the parent's debt with your attorney to understand your full potential exposure.
- Your business advisor should help you weigh the disclosed financial risks against the potential rewards of the franchise.
High Franchisee Turnover
Medium Risk
Explanation
Item 20 data reveals a pattern of system stagnation or slight decline, with a net loss of five franchised outlets in 2024. While the percentage-based turnover rate from terminations (around 4%) is not alarmingly high, the lack of growth is a concern. Item 19 notes that nine studios closed in 2024. A shrinking system could indicate underlying challenges with profitability, market saturation, or franchisee satisfaction, potentially affecting brand value and your long-term success.
Potential Mitigations
- Asking a significant number of current and former franchisees about their financial performance and satisfaction is critical; your business advisor can help structure these talks.
- Your accountant should analyze the three-year trend of unit closures and transfers to assess the system's stability.
- Inquire with the franchisor about their strategies to address the lack of unit growth and the reasons for recent closures.
Rapid System Growth
Low Risk
Explanation
This risk was not identified in the FDD Package. Rapid growth can strain a franchisor's ability to provide adequate support. You should still verify that the franchisor has the infrastructure and experienced personnel to effectively support its entire network, including your studio.
Potential Mitigations
- In discussions with existing franchisees, it is wise to inquire about the quality and timeliness of the support they receive from the franchisor.
- Your accountant can analyze the franchisor's financial statements to assess if they are reinvesting sufficiently in support infrastructure.
- Discussing the franchisor's support staff-to-franchisee ratio with a business advisor can help gauge their capacity.
New/Unproven Franchise System
Low Risk
Explanation
This risk was not identified in the FDD Package. The franchisor has been offering franchises since 2006 and has a substantial number of operational units. However, when evaluating any franchise, it is important to confirm the business model is time-tested and not reliant on a passing trend.
Potential Mitigations
- A business advisor can help you research the long-term stability and consumer demand within the therapeutic massage industry.
- Assessing the franchisor's history of innovation and adaptation to market changes is a useful exercise to do with your business advisor.
- It is prudent to review the business experience of the key management team in Item 2 with your attorney.
Possible Fad Business
Low Risk
Explanation
This risk was not identified in the FDD Package. The therapeutic massage industry has demonstrated long-term consumer demand. However, you should always assess whether the franchisor's specific business model and service offerings show evidence of long-term viability and are not solely dependent on current wellness trends.
Potential Mitigations
- Conducting independent market research with a business advisor to confirm sustained local demand is a key due diligence step.
- Evaluating the brand's ability to adapt to changing consumer preferences and economic conditions is prudent.
- Franchisee interviews can provide valuable insight into the stability of customer demand over time.
Inexperienced Management
Low Risk
Explanation
This risk was not identified in the FDD Package. The executive team listed in Item 2 appears to have relevant experience in franchising and large corporate environments. However, a prospective franchisee should always independently verify that the management team's experience translates into effective support and strategic direction for franchisees.
Potential Mitigations
- When speaking with current franchisees, asking specific questions about the quality of support and the competence of the management team is advisable.
- Your attorney can help you research the professional backgrounds of the key executives listed in Item 2.
- Assess with a business advisor whether the management team's stated experience aligns with the support needs of a franchisee.
Private Equity Ownership
High Risk
Explanation
Item 1 discloses that the franchisor is ultimately owned by KSL Capital Partners, a private equity firm. This ownership structure can create a risk that decisions are prioritized for short-term investor returns rather than the long-term health of the franchise system. This may manifest as pressure to cut support costs, increase fees, or focus on franchise sales over franchisee profitability. The complex debt structure detailed in the financials is a direct result of this ownership.
Potential Mitigations
- It is important to discuss with your attorney the implications of private equity ownership on franchise relationships.
- Asking current franchisees about any changes in culture, support, or fees since the private equity acquisition can provide valuable insight.
- A business advisor can help you research the private equity firm's reputation and track record with other franchise brands.
Non-Disclosure of Parent Company
Low Risk
Explanation
This risk was not identified in the FDD Package. The franchisor discloses its parent companies in Item 1. Furthermore, while the franchisor's financials are concerning, the FDD does provide audited financial statements for the franchisor entity itself as required.
Potential Mitigations
- Your accountant should always confirm that the provided financial statements are for the correct legal entity granting the franchise.
- If a parent company guarantees the franchisor's obligations, your attorney should ensure the parent's financials are also provided and reviewed.
- A business advisor can help research the corporate structure to identify any undisclosed controlling entities.
Predecessor History Issues
Medium Risk
Explanation
Item 1 does not list any predecessors. However, Item 3 discloses litigation against an affiliate, Amazing Lash Franchise, LLC, which itself had a predecessor. While not a direct predecessor to Elements, the shared ownership and management under WellBiz and KSL means that issues within affiliated brands, such as franchisee disputes over supplier pricing, could indicate potential cultural or systemic risks that may affect your franchise.
Potential Mitigations
- Your attorney should carefully review the history of the franchisor and all its affiliated brands for any patterns of concern.
- Discussing the history and evolution of the entire brand portfolio with long-term franchisees can provide important context.
- Researching the business practices of the parent company and its other franchise systems is a wise step for any potential franchisee.
Pattern of Litigation
High Risk
Explanation
Item 3 discloses a pattern of litigation that presents a risk. It details two recent arbitration cases filed by franchisees of an affiliated brand (Amazing Lash) alleging fraudulent nondisclosure and issues with required suppliers. It also discloses a past case against Elements Therapeutic Massage itself, brought by a franchisee for pre-sale misrepresentations, which resulted in a settlement and refund of the franchise fee. This pattern of franchisee-initiated legal action alleging misrepresentation and supplier issues is a significant warning.
Potential Mitigations
- A thorough review of the details of each case in Item 3 with your franchise attorney is essential to understand the potential risks.
- Treating a history of franchisee claims of misrepresentation or fraud as a significant red flag is a prudent course of action.
- Speaking with current franchisees to see if they have experienced similar issues is a crucial part of due diligence.
Disclosure & Representation Risks
Example Risk: Franchisee Financial Obligations
Blue Risk
Explanation
This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.
Potential Mitigations
- Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
- Conduct regular risk assessments
- Implement monitoring and reporting systems
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Financial & Fee Risks
Example Risk: Franchisee Financial Obligations
Blue Risk
Explanation
This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.
Potential Mitigations
- Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
- Conduct regular risk assessments
- Implement monitoring and reporting systems
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Legal & Contract Risks
Example Risk: Franchisee Financial Obligations
Blue Risk
Explanation
This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.
Potential Mitigations
- Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
- Conduct regular risk assessments
- Implement monitoring and reporting systems
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Purchase the complete risk review to see all 102 risks across all 10 categories.
Territory & Competition Risks
Example Risk: Franchisee Financial Obligations
Blue Risk
Explanation
This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.
Potential Mitigations
- Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
- Conduct regular risk assessments
- Implement monitoring and reporting systems
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Purchase the complete risk review to see all 102 risks across all 10 categories.
Regulatory & Compliance Risks
Example Risk: Franchisee Financial Obligations
Blue Risk
Explanation
This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.
Potential Mitigations
- Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
- Conduct regular risk assessments
- Implement monitoring and reporting systems
Unlock Full Risk Analysis
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Franchisor Support Risks
Example Risk: Franchisee Financial Obligations
Blue Risk
Explanation
This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.
Potential Mitigations
- Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
- Conduct regular risk assessments
- Implement monitoring and reporting systems
Unlock Full Risk Analysis
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Operational Control Risks
Example Risk: Franchisee Financial Obligations
Blue Risk
Explanation
This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.
Potential Mitigations
- Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
- Conduct regular risk assessments
- Implement monitoring and reporting systems
Unlock Full Risk Analysis
Purchase the complete risk review to see all 102 risks across all 10 categories.
Term & Exit Risks
Example Risk: Franchisee Financial Obligations
Blue Risk
Explanation
This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.
Potential Mitigations
- Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
- Conduct regular risk assessments
- Implement monitoring and reporting systems
Unlock Full Risk Analysis
Purchase the complete risk review to see all 102 risks across all 10 categories.
Miscellaneous Risks
Example Risk: Franchisee Financial Obligations
Blue Risk
Explanation
This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.
Potential Mitigations
- Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
- Conduct regular risk assessments
- Implement monitoring and reporting systems
Unlock Full Risk Analysis
Purchase the complete risk review to see all 102 risks across all 10 categories.
