Hand & Stone franchise unit economics
Hand & Stone franchisees run a massage and facial spa on a membership model. Across 570 franchised spas the average was $1,334,936 of gross sales.
- Primary source
- Hand and Stone Franchise LLC, 2026 Franchise Disclosure Document
- Items read
- Items 5 and 6 for fees; Item 19 for sales and any profit figure; Item 20 for the location count
- Population
- 134 of 600 locations
- Our calculations
- Marked on the page with an asterisk. Method
- Last reviewed
- 26 September 2026
Disclosure-based. Not a forecast, not an offer to sell a franchise, and not advice.
Labor takes about half of every dollar a Hand & Stone spa collects, and that is before the owner takes anything. In the bottom quarter of the system it takes 57.2%, the rent bill lands on too little revenue. Four cost lines alone add up to more than sales. The brand knows it: the CEO who arrived in July 2026 says improving franchisee unit-level economics is her job.
- Five points of labor is $587 a week, about one shift. Labor runs 48.1% of sales at the top quartile and 57.2% at the bottom, excluding whatever you pay yourself.
- In the bottom quarter, the disclosed costs exceed the sales. $666,122 of sales against $744,379 of costs, before the owner is paid anything.
- A cheaper site costs you more, as a share of sales. The bottom quartile pays less rent in dollars than the top ($120,772 against $161,100) and it costs them 18.1% of sales against 6.7%.
- The published cost benchmarks come from the better half of the system. 134 of 570 outlets reported costs; the other 436 sold less at every quartile, so expect to run heavier than the table.
- You will bank $146,413 a year in gift cards before you earn them. Cash in the door against a service owed on a date nobody knows.
How much does a Hand & Stone franchise make?
The average Hand & Stone unit reported $1,402,246 of revenue in the 2026 FDD, and the median reported $1,280,006. The brand’s disclosure document discloses revenue and not profit, so what an owner keeps depends on the cost structure set out below. Fees come off the top first, at about 11% of sales across royalty, brand fund and the rest of the stack. Revenue is not income. Rent, wages, cost of goods and the franchise fees all come out before an owner is paid. The figures for the highest-selling and lowest-selling businesses are below.
How the business works
The cost figures come from the stronger half of the system.
| quartile | Reported expenses | Avg gross sales | Silent | Avg gross sales | Difference |
|---|---|---|---|---|---|
| Top 25% | 34 | $2,390,658 | 109 | $2,197,412 | +$193,246 |
| Second 25% | 33 | $1,480,937 | 109 | $1,436,375 | +$44,562 |
| Third 25% | 33 | $1,063,624 | 109 | $1,014,552 | +$49,072 |
| Bottom 25% | 34 | $666,122 | 109 | $608,656 | +$57,466 |
Both sets of figures are disclosed; placing them side by side and taking the difference is marked *.
Read the cost table on the next tab knowing this: the spas that sent in their numbers outsold the rest at every level. The benchmarks there describe the better half of the system. So if your own percentages sit a little above them you are closer to the middle than the table suggests.
Where the sales come from.
| quartile | Outlets | Gross sales | Massage | Facial | Product | Gift cards |
|---|---|---|---|---|---|---|
| Top 25% | 135 | $2,277,452 | $1,269,636 | $606,704 | $86,425 | $241,393 |
| Second 25% | 143 | $1,469,435 | $891,168 | $386,839 | $54,502 | $161,006 |
| Third 25% | 145 | $1,042,031 | $640,429 | $272,890 | $38,227 | $113,029 |
| Bottom 25% | 147 | $627,439 | $419,971 | $160,635 | $20,769 | $77,919 |
| All franchised | 570 | $1,334,936 | $795,502 | $351,588 | $49,223 | $146,413 |
Each service line is split into quarters on its own, so read each row as quartile averages of each measure instead of as one outlet's income statement.
The highest-selling spas lean less on the massage table than the lowest-selling one. Massage is two thirds of sales at the bottom and a little over half at the top, while facials hold steady at about a quarter everywhere. Something else fills that gap at the top, and it stays unnamed, worth asking a top-performing franchisee directly.
Top performers
What separates the top Hand & Stone performers
Hand & Stone splits its locations into groups instead of publishing one average. The best group averaged $2,390,658 a year. The worst averaged $666,122. Both run the same brand, on the same agreement, paying the same fees. The middle location sold $1,280,006. The average was $1,402,246. More than half the system is below the number the brand quotes.
Decided before you open
- Trade area and site.A 3.6× gap between bands is not an operating gap. Catchment, daytime population and what sits next door set the ceiling before the first customer arrives.
- Territory, and how much of it is real.This model sells from a territory rather than a building. Two owners with the same brand and different ground are running different businesses, and density decides how much driving sits between jobs.
- What you spend to open.Opening costs $320,891 to $864,729, a 2.7× range inside one brand. The high end usually buys more capacity, so the cheapest build is not always the cheapest route to the top band.
- Lease economics.Occupancy cost ran 10.0% of sales in this filing. The rent does not fall when sales do, so the same lease is a far heavier line at the bottom of the system than at the top. That is how a weak site compounds into a weak profit line.
Live operating levers
- Wages, the dominant line.Wages take 50.3% of sales. Staff productivity, scheduling against demand hour by hour, and the balance of base pay to commission are where this is won.
- Occupancy, the line that does not flex.Rent and building costs take 10.0% of sales here. Sales per square foot and the hours the space is earning are the only two ways to move it, because the rent itself is fixed at signing.
- Members, the operating driver.This model bills on members. The owner watches how many people join, how many cancel, and what a member spends beyond the plan. It is worth watching every week, because by the time it turns up in a monthly close the quarter is half gone.
- The gift card book.Gift cards are sold before the service is delivered. The top performers are not selling more of them by accident, they are running a deliberate seasonal push into the holidays and out of it again. The accounting follows: a gift card is deferred revenue until it is redeemed, so cash and earned revenue arrive in different periods.
- Fees, and where the minimum bites.Fees run about 11.0% of sales. A minimum sits underneath the percentage, so the low-volume location pays the higher effective rate. The brand charges the weakest locations the most. Work out the sales level where the percentage overtakes the minimum and know which side of it you are on, because the answer changes what an extra dollar of sales is worth.
Context you underwrite around
- The reporting screen.134 of 600 locations are behind these figures. Locations open less than the full year, brand-owned, or not meeting the reporting criteria are excluded, so the numbers describe locations that cleared that screen, not the system as a whole.
- What the disclosure leaves out.Item 19 publishes no profit or cost data for franchised locations. The brand’s own locations are the only margin signal in the document, and they are run by the people who wrote the playbook.
The costs
The cost structure across quartiles.
| Line | Top 25% | Second 25% | Third 25% | Bottom 25% | All 134 |
|---|---|---|---|---|---|
| Outlets | 34 | 33 | 33 | 34 | 134 |
| Gross sales | $2,390,658 | $1,480,937 | $1,063,624 | $666,122 | $1,402,246 |
| Labor and benefits | $1,150,560 | $740,179 | $544,536 | $381,024 | $704,996 |
| as % of gross sales | 48.1% | 50.0% | 51.2% | 57.2% | 50.3% |
| Building costs | $161,100 | $140,627 | $137,805 | $120,772 | $140,089 |
| as % of gross sales | 6.7% | 9.5% | 13.0% | 18.1% | 10.0% |
| Royalties and national marketing | $182,704 | $107,379 | $76,463 | $48,392 | $103,911 |
| as % of gross sales | 7.6% | 7.3% | 7.2% | 7.3% | 7.4% |
| Other operating costs | $471,115 | $322,636 | $271,065 | $194,191 | $315,019 |
| as % of gross sales | 19.7% | 21.8% | 25.5% | 29.2% | 22.5% |
| Sales less these four lines | $425,179 | $170,116 | $33,755 | −$78,257 | $138,231 |
| as % of gross sales | 17.8% | 11.5% | 3.2% | −11.7% | 9.9% |
Treat this residual as a gross figure, well above real profit.
Rent is the line that punishes a slow spa. The bottom quarter pays less rent in dollars than the highest-selling ($120,772 against $161,100) and nearly three times as much as a share of sales. Because there is so much less revenue to range it over.
Labor works the same way, more gently. You need a front desk and a minimum roster whether the book is full or empty. So labor runs 48.1% of sales at the top and 57.2% at the bottom. The only cost that scales cleanly with you is royalty and national marketing, at about 7.3% wherever you sit.
Which means the middle of this system is tighter than it looks. A spa at $1,063,624 of sales has $33,755 left after those four costs. That is still before it pays the owner anything, covers depreciation, or meets the costs left out. Below that, the four costs exceed sales.
What the gaps are worth in a week. At the average spa, pulling labor from 50.3% to the top quarter's 48.1% is $587 a week, about one shift. From the bottom quarter's 57.2% to average is $884 a week. The step from the third quartile to the second is $8,025 a week of service revenue. Ours, from the disclosed figures.
The corporate spas are a Florida sample.
The franchisor's own spas earn far more than the franchised average, and you will probably be shown that. Fourteen of the fifteen sit in Florida, so read it as one market's result.
| Line | Average | As % of gross sales |
|---|---|---|
| Gross sales | $2,281,726 | n/a |
| Labor and benefits | $1,090,504 | 47.8% |
| Building costs | $151,965 | 6.7% |
| Royalties and national marketing | $158,507 | 6.9% |
| Other operating costs | $412,464 | 18.1% |
| Sales less these four lines | $468,286 | 20.5% |
Dollar figures as disclosed; percentages and the residual are marked * and have the same exclusions.
What the money side covers
Eleven percent of sales leaves before anything else.
| Fee | Rate | Paid to | Frequency |
|---|---|---|---|
| Royalty Fee | 6% of Gross Sales | Franchisor | Weekly |
| Marketing Fund Contribution | 1% of Gross Sales, may rise to 2% | Franchisor | Weekly |
| Local Advertising Fee | 4% of Gross Sales, minimum $400 per month | Your own market | Weekly |
| Total on gross sales | 11% | n/a | n/a |
As the brand reported it.
Two different numbers get quoted here and the difference is real money. About 7.4% of sales goes to the franchisor. Eleven percent leaves your control. The extra four points are local advertising, where you choose the how and the agreement fixes the whether. It has a $400 monthly minimum that holds steady as your sales move.
Questions we get asked
Does Hand & Stone disclose whether franchisees make money?
Partly. Four cost categories cover 134 of the 570 spas. Take them off sales and the average spa has $138,231 left on $1,402,246 of sales. Treat that as a gross figure: it sits above your own pay, depreciation, and everything left out. Your real number is lower, by an amount left unquantified.
Why does it matter that only 134 outlets reported expenses?
Because the other 436 sold less, between 3.1% and 9.4% less at the same rank. The cost picture comes from the spas that were selling better, so it flatters the system. Plan on running heavier than it.
What is the biggest cost in a Hand & Stone spa, and where is the room in it?
Labor, by a distance, about half of sales, excluding your own pay. The nine points between the top quartile at 48.1% and the bottom at 57.2% are the largest recoverable sum here, and they come from schedule density. Rent averages 10.0% and reaches 18.1% at the bottom, where only sales close the gap.
Which number should I measure my spa against?
Your own quartile. The average is $1,334,936 and the median $1,236,266, but the range runs $145,813 to $4,394,479, so the system figure describes nobody. Find your quartile in the sales table, read across to the cost table, and the gaps there are your year's work.
Who does bookkeeping for a Hand & Stone franchise?
A good deal of what sits in your bank account is service you still owe. Memberships bill monthly in advance and become revenue as the massage is given. Prepaid packages work the same way and draw down visit by visit. Gift cards are a third pile (the average spa sells $146,413 of them a year) cash today against a service owed on a date nobody knows, with rules that differ by state.
On the cost side, split labor between front desk, massage therapists and estheticians. Build the chart of accounts around those same four categories, with local advertising inside other operating. You can compare yourself to the system without rebuilding your numbers every time. Averan provides bookkeeping, controller, and fractional CFO support for franchise owners and has Certified QuickBooks ProAdvisors on the team.
- No profit figure. The filing reports sales and not earnings, so what an owner keeps is not disclosed.
Questions worth putting to Hand & Stone
The filing answers what it answers. These are the gaps an owner or a buyer should close directly.
- What do locations at the median spend on wages and rent as a share of sales? The filing reports sales only.
- What separates the highest-selling locations from the lowest: trade area, years open, size, or the owner?
- How long does a new location take to reach the average you publish, and what does the build-up look like month by month?
- At what level of sales do the minimum charges stop applying and the percentage take over?
- How many Hand & Stone locations closed, were sold, or changed hands last year, and why?
Run your own numbers.
The Franchise Finance Diagnostic runs the same checks on your own numbers. It scores where you stand and compares you with Item 19 of your brand’s FDD. It works out what one location earns and spends, and builds a 13-week cash forecast. Checks whether you are ready to open another one. It is free and it runs in your browser.
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