Requirements

Overview of Start-up Costs

Liquid assets are one of the key indicators of whether or not a prospective franchisee is capable of financing a full-size Le Spa Massage sanctuary. We recommend liquid assets of at least PhP1,200,000 ($21,000) per unit as a basis for pursuing in-depth feasibility discussions. Based upon our most recent opening, the minimum initial investment to open a typical freestanding Le Spa Massage sanctuary, excluding real property is PhP600,000 ($10,500). A substantial portion of this cost can normally be financed through traditional sources, depending on the franchisee's financial soundness. However, Le Spa Massage does not provide any financing to its franchisees, nor will it guarantee any note, lease or other documents executed by franchisee.

The total required investment in a Le Spa Massage sanctuary also varies, depending on the franchisee's real estate arrangement (lease or purchase). Le Spa Massage has no financial involvement in the real estate, but provides experienced counseling in site selection/development and reserves the right to approve all proposed locations. The actual selection, purchase or leasing of the site is the franchisee's responsibility.

Typical Costs for a Le Spa Massage Franchise Fee

The initial fee per franchise issued is PhP300,000 ($5,300)

The initial fee covers the issuance of the franchise, as well as helping to defray the costs and expenses of Le Spa Massage in connection with our assistance and supervision in site selection, construction and improvements, opening of the sanctuary, training, enforcement and protection of trademarks and other incidental costs.

Costs of Improvements

The approximate cost to build a typical freestanding Le Spa Massage sanctuary in a suburban market is between PhP200,000 - PhP300,000 ($3,500 - $5,300). The building size would be approximately 150 square meters. A sanctuary this size is a self-contained unit and will provide the following facilities:

• 10 Massage Rooms and 8 Spa Recliners
• Waiting Area
• Pantry area
• Storage facilities supply items
• Employee locker rooms
• Sanitary facilities for employees and guest
• Office
• Sauna Room

Equipment and Fixtures

The approximate cost for all equipment and fixtures necessary for the opening and operation of a Benihana restaurant is PhP200,000 - PhP300,000 ($3,500 - $5,300). A portion of the equipment and fixtures is to be purchased from designated suppliers and the balance must conform to our specifications. A complete list of necessary equipment and fixtures will be provided.

Inventory

Initial inventory includes all items needed to open a sanctuary such as products, spa vessels, glassware, paper supplies, uniforms etc. and usually cost approximately PhP10,000 ($200).

Working Capital and Reserve Fund

Working capital of PhP100,000 ($1,800) should cover the estimated cost for all pre-opening expenses, such as legal fees, salaries and security deposits, in addition to any unforeseen expenses.

On-going Business Expense

Royalties

A continuing royalty fee is five percent (3.5%) of gross sales paid monthly for Le Spa Massage franchises.