Spa chain expands via "build-to-sell" concept

By Ehda M. Dagooc (The Freeman) Updated June 08, 2009 12:00 AM

CEBU, Philippines - As the Spa and wellness industry in the country continues to post promising prospects, spa chain Body & Sole is embracing a unique expansion concept via build-to-sell (BTS) strategy.

Cebu-based Body & Sole brand, which is the largest spa chain in the country, recently created another subsidiary company to focus on its expansion plan called “Body & Sole Express Corporation,” this is to offer a different expansion model, which has been proved to be successful in other industries like the 7/11 chain of convenience stores.

In a press conference, Body & Sole president Johnie Lim said that unlike the typical franchise strategy, wherein dealings with the franchisee will take longer, the BTS concept on the other hand, will give an interested investor an “instant business” by buying an outlet of her choice.

Lim, together with a Manila-based partner, will start this concept at its new outlet located in Ortigas in Metro Manila that will be up for sale once the company will be able to set up and run it for a while and after a buyer can take over.

According to Lim, the company is planning to build about nine outlets all over the country, mostly in Metro Manila, and some parts of Luzon that will adopt the BTS model.

“This is for people who have the money and want to start a new business instantly or immediately without having to worry of the facility and outlet construction, and other hassles,” Lim said.

In the BTS concept, Body & Sole will have the outlet run commercially, and immediate take over of the business will be done, after the investor buys it.

Although, Body & Sole will continue its franchising business, Lim said the introduction of BTS will give investors another choice in operating a “branded” Spa outlet immediately.

Part of the contract, under the BTS model, is to retain the Body & Sole brand, and owner must uphold the service standard adopted by the chain including the pricing of its services, among others.

The company on the other hand, still gets a royalty fee from the buyer, Lim said.

Lim’s Body & Sole has now over 40 outlets nationwide. Majority of these branches are managed by franchisees.

A single outlet for instance, will be sold at least for P1 million (all-in), “in the following day, after the buyer pays, he can already run the business. That’s the beauty of this concept.”

The company on the other hand will not build an outlet that will cost over a million pesos, as this is targeted for the small entrepreneurs, while bigger ticket investors could opt to take the franchising scheme.

In franchising, he said while the franchisee pays the franchising fee, he still has to invest on construction of the outlet and other legal and documentary processes. The BTS on the other hand, business turn over is faster, Lim said.

Lim mentioned that this strategy will be adopted by the company outside of Cebu, as he described Cebu’s Spa industry as “saturated.”

He said there is no room for expansion in Cebu. But, there are a lot of promising areas around the Philippines for this kind of business.

He mentioned that OFWs (Overseas Filipino Workers) for instance, who want to get into business back home can immediately invest on the BTS model for less hassle and faster return of investments (ROI).