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09 Nov 2017
Exclusive: Yelo Spa expands with franchising model
BY
Jane Kitchen
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Ronco says he has 'cracked the code' of how to make a franchise spa work in a demanding, expensive urban market
photo: Yelo Spa
Yelo Spa founder Nicolas Ronco is taking the next step with his urban day spa model – offering it for franchise in major cities. Yelo’s flagship New York location has been operating since 2007 and Ronco has revealed that the time is right to grow the business.
Yelo’s model is tailored specifically for urban centres and Ronco hopes to see locations in major US cities, along with international hotspots like London, Paris, Tokyo and Sydney. His goal is to have 150 to 200 Yelo Spa franchises within the next five to seven years and to become a “major player” in the franchise world.
“The goal is to capture a niche that is not captured today,” said Ronco. “Most franchises address a very different market – the suburban market – and none of those brands have been able to be successful in these urban, high-cost centres. We’ve really cracked the code of how to make it work in a very demanding and expensive city like New York.”
Yelo’s model simplifies the spa menu into three categories: massage, skincare and sleep. Ronco tapped into the idea of sleep therapy in spas 10 years ago when he opened the first Yelo location.
“When we opened initially as a spa offering napping, people thought we were crazy,” he said. “Today, people see us as visionary.”
The Yelo model uses a unique price-per-minute option which lets guests book treatments in lengths from 30 minutes in ten-minute increments. Clients choose the length of their session, what treatments they would like included, and what music and aromatherapy they want used.
“We want to make sure we can fit into people’s schedules – and people’s wallet,” said Ronco.
All treatments are offered in the patented Yelo Cab – a hexagonal spa cabin developed with help from sleep experts, which features curved inside walls, LED lights, aromatherapy and special pillows. The cabins are fitted with a Yelo Chair – a zero-gravity treatment bed – and can be used for any of Yelo’s offerings, from massage to skincare to napping. The Yelo Cabs are modular, and fit together seamlessly, much like a beehive – which is where Ronco drew his inspiration for the units.
Yelo Cabs are also transportable, and can be assembled and reassembled, which makes them ideal for corporate campuses, malls, airports, or work-sharing spaces like WeWork – all of which Ronco sees as a big part of the Yelo expansion model.
Franchisees pay a US$45,000 fee upfront, along with pre-opening fees and the cost of hardware like the Yelo Cab and Yelo Chairs, and then a seven per cent royalty monthly – two per cent of which is reinvested in the marketing of the brand. Franchisees must take a minimum of five cabins, with a footprint of 1,500sq ft, but can customise to a larger option.
In addition to the 150 to 200 Yelo spa franchises he hopes to open, Ronco has plans to develop his own product line and management services to go with the spa. “The way we’ll be growing in the next 10 years is extremely exciting,” he said.
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