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Why the founder of Zen Massage decided franchising was not for him

A Zen Massage Dilworth employee gives a client a massage while founder Kevin Koon stands in the foreground. Koon and his wife, Lea, started Zen Massage 10 years ago after searching for a cost-effective way to enjoy the health benefits of typically pricey massages.
A Zen Massage Dilworth employee gives a client a massage while founder Kevin Koon stands in the foreground. Koon and his wife, Lea, started Zen Massage 10 years ago after searching for a cost-effective way to enjoy the health benefits of typically pricey massages. ogaines@charlotteobserver.com

Kevin Koon’s concept for a getaway spot offering low-cost massages without the pangs of a contract took off much faster than he expected.

The Charlotte-based Zen Massage, which started a decade ago with him, his wife and one massage therapist, grew into an enterprise that, at the height of the recession, employed more than 20 people, drew a crop of loyal customers and generated about $600,000 in revenue, he said.

In 2007 – two years after the first center opened in Dilworth – Koon, 45, decided to franchise his venture.

“You get these big ideas (like) ‘There’s going to be a Zen in every city,’” he said. “People were saying, ‘You should franchise this.’”

In 18 months, he sold 39 Zen Massage franchises across the U.S. Three years later, he sold the Zen Massage franchise brand to a colleague for an amount he did not disclose.

Historically, franchising has been heralded as an indicator of business success. Steve Caldeira, president of the International Franchise Association, has called it an “American success story.”

The story, for Koon, was a little different.

The system is “set up to be confrontational,” he said. “The franchisees that were doing really well, following the system and making good money, they (took) the ‘Janet Jackson’ philosophy (of) ‘What have you done for me lately?’”

Health and cost benefits

A serial entrepreneur since he was 26, Koon decided to open a massage center after he and his wife, Lea, got tired of paying $250 for quality couples massages. His mother-in-law, who suffered from lupus, scoliosis, fibromyalgia and arthritis, paid $100 for regular massages to soothe her pain.

“The price tag was kind of high,” Koon said.

Massage therapists on average charge $68 for an hour, according to the American Massage Therapy Association. But before discount massages became trendy, Koon said he could wind up spending much more.

“What if you … don’t make that much money?” he thought. “What if you’re a waiter, bartender, dishwasher? … How do you take care of any pain in your body?”

He researched the $11.7 billion massage industry and asked professionals he knew if they would pay about $40 for regular massages without any commitment. The overwhelming answer, he said, was yes.

After buying a building on East Boulevard, the Koons opened Zen Massage in February 2005. Experienced in marketing, the Koons used cost-effective advertising and word-of-mouth to make the center profitable. Today, the Dilworth center churns out about 300 massages a week, and last year generated $803,000 in sales.

In a time when massages are considered chic, businesses like Massage Envy and Hand & Stone have made inroads in the Charlotte area. Koon says he tries to set Zen Massage apart with its pricing (a one-hour Swedish massage costs $49.95), sales pitch (i.e., no contracts/membership fees) and focus on healing the body (hence the name “Zen”).

“I don’t want to sell contracts and I don’t want to have to get in a scuffle with people,” he said. “We focus on getting people out of pain. That’s how we keep growing.”

Confrontational and complicated

For a while, a viable franchise system contributed to that growth. Franchisees paid up to $150,000 in startup costs to open their own Zen Massage center. That included their franchise fees, which ranged from $25,000 to $30,000.

Koon offered perks. Instead of requiring franchisees to buy massage tables, oils and lotions from him exclusively, he connected them with product warehouses that gave discounts.

“I wasn’t marking things up,” he said. “You’re paying me to learn this concept and learn our system. … You’re part of the family.”

But not everyone was content with just being part of the family.

“Out of the 10 main marketing things you’d want them to do, they’d do two,” he said. “And, if they had no success, (they would say) you sold them a lemon.”

Tensions between franchisors and franchisees are not unusual.

“As a franchisor, you’re expanding your business using other people’s money,” said Daniel Fischer of FranNet Carolina, a Matthews-based franchise consulting firm. “If you don’t have the resources to handle it all, you’re going to spend a lot of time … dealing with divas. Everybody wants something different.”

Selling the franchise

From impending retirement to acquisitions by bigger companies, the reasons franchisors might sell their businesses are varied, said Bret Lowell, founder of Franchisor Pipeline, an online marketplace for buying and selling franchise systems.

“If franchising is done right, as evidenced by how successful it is, these businesses grow and do well,” he said. But “people do stumble.”

Koon doesn’t see his experience as a stumble. He doesn’t take shots at franchising, but it just wasn’t for him. He and his wife still own and run the original center they started in Dilworth, while a former employee owns the franchise system.

For the Koons, the focus now is growing their Dilworth center. The goal in the next three years: Make $1 million in sales.

“Our goal was to make massage simple,” Koon said. “It doesn’t cost a lot and you can come on a regular basis.”

Marketing his massages

Here are some budget-friendly marketing tips that Kevin Koon uses to promote his business:

▪ He uses “green” printers that use recyclable materials for his fliers and business cards.

▪ He researches different brands of oils and lotions for the best deals. During some stretches, he can save $40 a month by shopping selectively.

▪ Koon includes rates on his business cards. When people comment on the prices, he tells them about his center’s affordability.

▪ Koon and his wife, Lea, have branched out into another venture, Massage Mentors, a consulting program that helps business owners start a massage therapy center.

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