Franchising Since: 1989
Headquarters: Long Beach, California
Estimated Number of Units: 80
Franchise Description: Relax The Back Corporation is the franchisor. A Relax the Back store is a carefully designed concept, specializing in products for wellness, the relief, prevention, care, and treatment of back pain and discomfort. The franchise offers guidance and assistance, distinctive interior design and operating specifications and training in site selection, marketing, purchasing, store layout, signage, business operations, inventory, and accounting systems.
Training Overview: Franchisees (and their initial store manager, if applicable) must successfully complete the initial onboarding training program to the franchisor’s satisfaction, at a time and place (or virtually, at its election), and for such period, as the franchisor designates in its judgment, before beginning operation of their Relax the Back store. Currently, the program includes departmental training through Relax the Back University (RTBU) to be held virtually and includes a minimum of 10 days of “on the job” training at a Relax the Back store the franchisor designates. Franchisees and their manager must attend additional and/or refresher training programs conducted at locations specified by the franchisor, including national and regional conferences, conventions and meetings. The franchisee’s other employees may be required to attend mandatory training programs presented by the franchisor at the franchisee’s store (or virtually). The franchisor also may conduct on an annual basis a minimum of one on-site visit for general business purposes (or virtually), which may be combined with a training session.
Territory Granted: The franchisor grants franchisees the right to operate their Relax the Back store at a single location. Franchisees will not receive an exclusive territory. However, so long as franchisees are in compliance with the Franchise Agreement, they will receive a protected territory. The franchisor establishes the territory after considering geographic, market, population, and other relevant factors, as well as the franchisor’s overall development strategy. The size of a territory is determined by the franchisor and varies from franchise to franchise, but frequently is comprised of an area that forms a two to three mile radius around the approved site. Some territories may be political divisions (e.g., city, town, state) or established by map references.
Obligations and Restrictions: The Relax the Back store must be personally managed on a full-time basis by a person who has successfully completed all the training required and who meets all of the other then-current standards. Franchisees must operate their store to meet system standards and sell only the products and services the franchisor periodically designates. Beginning 24 months after the date of the Franchise Agreement, and every 12 months thereafter, the franchisor may compare the franchisee’s adjusted gross sales to other franchisees in good standing with their Franchise Agreement during that time. If the franchisee fails to meet our designated financial standards and fail to achieve the results required through the franchisor’s correction process as outlined in the Franchise Agreement, the franchisor may eliminate or reduce the size of the franchisee’s territory.
Term of Agreement and Renewal: The length of the initial franchise term is 10 years. Franchisees may be eligible for a successor franchise (which may differ materially from the current Franchise Agreement) for (i) one 10-year term, or (ii) one five-year term, if requirements are met.
Financial Assistance: The franchisor does not offer direct or indirect financing. The franchisor does not guarantee a franchisee’s note, lease, or other obligation.
Estimated Initial Investment
| Name of Fee | Low | High |
| Initial Franchise Fee | $5,000 | $29,500 |
| Real Property Improvements | $0 | $75,000 |
| Rent / Security Deposit | $5,000 | $20,000 |
| Equipment, Fixtures, & Supplies | $33,230 | $55,000 |
| Initial Inventory | $22,000 | $22,000 |
| Other Inventory | $74,900 | $109,000 |
| Training Related Expenses | $2,000 | $7,500 |
| Grand Opening Expenses | $10,000 | $10,000 |
| Insurance | $3,000 | $5,000 |
| Exterior Signs | $6,600 | $19,800 |
| Computer Hardware & Software | $3,020 | $3,050 |
| Visual Merchandising Fee | $0 | $4,000 |
| 6 months’ Additional Funds | $30,000 | $60,000 |
| ESTIMATED TOTAL | $194,750 | $419,850 |
Other Fees
| Type of Fee | Amount |
| Continuing Royalty | For the first store: (i) no fee for first 12 months; (ii) 5% of adjusted gross sales for months 13-24; and (iii) for months 25+, the greater of 5% or $1,875. For the second or subsequent store, (i) for the first 12 months, 3% for adjusted gross sales up to $500,000, then 4% for the remaining year; (ii) 4% of adjusted gross sales for months 13-24; and (iii) for months 25+, the greater of 4% or $1,875. |
| Marketing Fund Fee | 2% of adjusted gross sales. |
| Digital Marketing Co-Op | 2% of adjusted gross sales. |
| Additional Training / Conventions | Will vary. |
| Transfer Fee | $7,500 |
| Audit Costs | Costs of audit, in addition to understated amounts. |
| Inspection Costs | Cost of inspection, including supplier fees, travel expenses, room and board, and compensation of the franchisor’s agents. |
| Interest on Late Payments and/or Reports | Maximum legal interest (18% cap). |
| Franchise Renewal Fee | 10 years = $0 5 years = $12,000 |
| Management Fees | $150 to $250 per day plus costs (subject to change). |
| Insufficient Funds Fee | Currently $100 per instance (subject to change) |
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