046: Adding The Human Touch at Hand & Stone Massage and Facial Spa with Chris Amatos
May 14, 2021
When everything shut down due to Covid-19 in March 2020, the uncertainty was crippling for many businesses. In this episode, you’ll hear how Hand & Stone Massage and Facial Spa was able to turn lemons into lemonade thanks to their membership-based business.
Located in the Lewis Center in Columbus, Ohio, this outpost of a well-known franchise provides customers with high quality massages and facials at extremely affordable prices. And with the stress and anxiety that a lot of people were dealing with last year, having a business that couldn’t be replaced by internet shopping proved to be very valuable.
Today, Chris joins the podcast to share how he became a business owner decades into his working career, why he didn’t lose members (and actually got new ones) in 2020, and what keeps his customers coming back each month.
Here are just a handful of the things that we'll discuss:
- How Chris used his experience as a business reporter to become a business owner himself after getting downsized in 2013.
- The criteria Chris used to determine what kind of franchise to get involved in.
- Why franchises are less likely to be failures for first-time business owners–and the important questions Chris asked as he found a franchise to get involved in.
- How their membership-based business allowed them to weather the storm when everything shut down in March 2020.
- Why Hand & Stone hasn’t experienced any business slowdown since reopening last May.
- “The failure rate for people who do a franchise is much, much lower than people who start a business on their own.” – Chris Amatos
- “Our members mean everything to us. We want to make sure that we don’t take them for granted.” – Chris Amatos
- Hand & Stone Massage and Facial Spa
- Hand & Stone Massage and Facial Spa – Columbus
- Email: firstname.lastname@example.org
LeAnne Siddell: It’s The Retirement Trainer with Ed Siddell, a podcast about finding ways to help you become financially fit for your future no matter what financial shape you’re in now. 2020, we’ve been talking about it a lot. It was a challenging year for a lot of people, and in particular, small business. And EGSI Financial believes in giving back to the community that has supported us for nearly 20 years. Giving Back to Small Businesses is the name of the campaign.
And as part of it, we’re highlighting two businesses every month on our podcast, ED Siddell, The Retirement Trainer, which is on iHeart, Spotify, Apple Play, everywhere you listen to your podcasts to learn about these small businesses and what kept them going and succeeding in COVID-19. Our goal is to promote and learn lessons of these small businesses so other business owners can draw upon their experiences and lessons and to enhance their own situation.
Today, we have Chris Amatos joining us on our podcast. He is the owner and operator of Hand & Stone Massage and Facial Spa, located in Lewis Center, Columbus, Ohio. This is LeAnne Siddell. And here to help us with all our questions and to give us some guidance to help us stay in the best financial shape possible, The Retirement Trainer, Ed Siddell.
LeAnne Siddell: Hi, Ed. Hi, Chris.
Ed Siddell: Hey, LeAnne. Hey, Chris. How are you?
Chris Amatos: I’m very well, thank you. Thank you so much for having me on.
Ed Siddell: Well, thanks for joining us. You have such a unique story. Your journey in the business world from being an executive to a business owner, and then having to go through what you went through last year. I think a lot of people can learn an awful lot from, not just the trials that you went through, but successes, how you kind of turned the thorn into a rose. And really, I mean, it’s a remarkable story. So, if you don’t mind, do you mind kind of sharing your background and how you got into being the owner-operator of this franchise, and then we can kind of go from there?
Chris Amatos: Sure. So, my basic background actually is as a business reporter, I was a journalism graduate at Ohio State and was in the newspaper business for about 18 years or so. And for most of that time, I was a business reporter, I was the assistant business editor dispatch for several years, and so I left, which was in 1994. And then after that, I got into the world of corporate communications. I did that for about 17 years at American Electric Power Company. Unfortunately, I was downsized and I guess it was 2013 now.
And so, when that occurred, I had several years’ experience doing both corporate communications and in the world of journalism. And the economy in 2013 wasn’t so good that a person my age wasn’t able to get a job pretty easily, unfortunately. I tried for about six months and didn’t end up with much. And so, I thought, well, guys, you know, I’ve got a lot of experience writing about business. And I thought, maybe it’s time to actually give it a try myself.
One of the great things about being a newspaper reporter is you get to talk to so many different people from across the spectrum, particularly when you’re a business reporter and you have access to a lot of people in the community. And Columbus is such a strong franchising town, that’s one of the things I wrote about a lot when I was back at the dispatch, I was writing about franchises and how they were growing and just how are they doing in general and the challenges they face. So, I thought when I decided, maybe I should look at getting into business myself, I thought, well, gee, a franchise makes a lot of sense because there are just so many reasons why our franchise is a good way to start a business if you have never done it for yourself.
And so, I took a lot of the knowledge that I had from being a business reporter and started looking at different concepts and worked with a couple of different franchise brokers, which is kind of an interesting field unto itself. One of the things you realize when you start looking at franchises and franchising in general is that there are franchises that sell franchises. That’s how far…
Ed Siddell: So, it’s like the layer of the cake.
Chris Amatos: Yeah, that’s really true. That’s how far that whole concept that’s developed is that you can buy a franchise to sell franchises. And I thought that was a pretty interesting thing unto itself. So, I worked with a couple of franchise brokers and I learned a lot just in that process. And the good ones will take the time to find out what your interests are, what your strengths are as an individual and perhaps, as a business person, and then try to find franchises that match your personality, which I think really is important if you’re going to go down that road.
LeAnne Siddell: Absolutely.
Chris Amatos: So, yeah, I mean, I thought that was very reassuring when I talked to one of the brokers who took the time to explain that process to me and explain how he works. So, he came up with about five different concepts for me to look at. And three of them were kind of marginal, two of them were pretty strong and one of those was Hand & Stone, which is, of course, what I ultimately went with. And when I started looking at franchises myself, I kind of set up some criteria that I thought were critical to being successful.
Among them were first of all, it had to be a business that could not be replaced by the Internet,. and…
Ed Siddell: Smart, especially this date and age.
Chris Amatos: In 2013, that was important. Of course, now in 2021, it’s even more so. If you’re getting into some kind of a retail venture, for example, you need to make sure that that’s not a product that the people can purchase elsewhere by going to Amazon or wherever and shopping from home. And so, I didn’t really want to get into a retail kind of business. Even though I had written extensively about the fast food industry for years, because, again, Columbus is such a strong fast food town, I didn’t really want to get into that either, because that industry has its own challenges. Among them can be widely fluctuating commodity prices. It’s very competitive. There are just a whole lot of reasons and…
Ed Siddell: Small margins.
Chris Amatos: …require a lot of capital. Yeah, small margins are going to require a lot of capital upfront. So, that was something I kind of wanted to stay away from. And interestingly enough, a lot of the franchise brokers will tell you right up front they don’t do fast food. That’s because of those reasons and probably some others, I think there can be also a high failure rate in that industry that’s just not something that they do. So, everybody that I worked with was doing away from that industry to begin with, which shouldn’t be fine.
So, again, they came up with a couple of different concepts. And I like Hand & Stone for several reasons. One of which was that my primary criteria, it’s not a service, could be replaced by the Internet. Two, it was a brand-new concept in the market at the time. There were no Hand & Stones in the state of Ohio.
Ed Siddell: Oh, were you the first one?
Chris Amatos: I was the first Hand & Stone in Ohio. And there are now about 15 or so.
Ed Siddell: Wow. Yeah, I mean, just even right here in Columbus, I mean, there’s a ton now.
Chris Amatos: Yeah, there are five in Columbus now. Two just opened in November. So, I was kind of breaking ground, which I thought would be a good opportunity. The other thing that I was looking at was that this was an established company, but it would still have a lot of growth potential. There were about 113 Hand & Stones open at the time that I signed to my franchise agreement. So, clearly, an established company, but not so big that there wasn’t a lot of potential to grow.
And again, bringing that concept to Ohio I thought was interesting. Also, the massage industry itself is one that was growing rapidly at the time and I think probably is growing even faster today. It’s a service that most people want to enjoy. A lot of people had probably never had a massage at that point and probably, many people perceive that to be something that was maybe not really within their reach. And one of the things that Hand & Stone was doing was making massage and facial and skin care services an affordable luxury. It was making those services that had been perceived as being something that would cost more money than most people wanted to spend on a regular basis and making them very affordable. It was like $60 a month.
And that’s still the price, a price that many people can afford and enjoy the service on a regular basis. And it’s something that helps people relax. And I think more people are paying attention to their personal care, their health. And this is something that can really reduce tension, make you feel better about yourself. Getting skin care services is going to help your appearance, just a whole host of reasons why this appealed to me. And interestingly enough, I’d never have a full body massage at that point, but it’s something I always knew I wanted to have. And I went out and got one and I thought, wow, yeah, there’s no doubt this is something I’m going to really enjoy.
Ed Siddell: That’s awesome.
Chris Amatos: So, I thought, that kind of sealed the deal for me. So, Hand & Stone, I thought was kind of an obvious choice. And there are certainly other franchises in the industry, but this was the one that, in my mind, set itself apart because they really strive to provide a higher level of service than some of the other companies, they have a very expensive, probably the most expensive menu of both facial skincare and massage services out there. And I can back that up with numbers now, because I can tell you that Hand & Stone’s goal is to make skin care services 40% of revenues. Most of our competitors, that’s probably 10%.
Ed Siddell: Wow. So, that’s a whole new market segment.
Chris Amatos: Exactly. So, you’re able to draw and appeal to a much broader range of the market. And that’s a win-win because that means that your massage therapists are going to have a whole nother group of prospective clients that they can reach out to. And conversely, the facial clients might want to come in and get a massage on a periodic basis. So, it just broadens our opportunity to attract clients into the company. So, for all these reasons, I really thought Hand & Stone was a good fit. So, we opened our unit. Did you have a question?
Ed Siddell: No, I was just going to say, when you have that kind of a cross section between the massage and the skin care, I mean, you get the ability to grow both sides at the same time. And again, it’s a whole new market segment on top of it because you’re lowering the prices. So, now, like you said, it’s an affordable luxury.
Chris Amatos: Exactly, right, and again, it’s a concept that has proven itself to work very well. And when you look at the numbers, at the time when I got my franchise disclosure document, which is something that every franchisor has to provide to prospective franchisees, the numbers I thought, basically told the tale that this is the concept that works. So, it was an easy decision for me at that point. It was something that my wife and I discussed at length. And one of the things I wanted to mention is anybody who’s thinking about getting into business for themselves, make sure that you have the support of your family.
Ed Siddell: Absolutely.
Chris Amatos: Because if you don’t and if they don’t fully understand what they are getting into, it can make for some difficult times. Sandy and I discussed this. I remember we were having dinner one night out of Easton and it was a beautiful summer night. And we were talking about various opportunities that I could pursue. And she said, well, what do you want to do? And I said, well, I really like Hand & Stone best. And at that point, it was even the possibility that maybe I could get a job somewhere. And she said, “Well, then, if that’s the case, that’s what you should do.” And that really meant the world to me.
And the fact that she was willing to back what was still kind of a risky proposition, because even though I’ve got an MBA and I’ve got a lot of experience writing about these things, I’d never done it myself. And so, there was always, of course, risk involved when you set up any kind of a business, but she was willing to support me and that meant a lot. And frankly, I don’t think she fully understood what it was going to mean for her, because for a while, she had to work two jobs.
Ed Siddell: Yeah.
Chris Amatos: That kind of keeps us going. And I don’t think that’s something that she kind of anticipated at the time, but she did it willingly and did that for a while when we were getting started. And that showed the level of commitment that she made to this…
Ed Siddell: Well, that’s teamwork. I mean that’s a part of the ship right there.
LeAnne Siddell: I was just going to say, but in large part, it’s funny because I can still remember when Ed told me, he was going into business. He had worked for this organization for a very, very long time and was going into business for himself. We were starting a brand-new family, but again, it’s the confidence that you have in your spouse. And I think that’s the way it is with Sandy, she has absolute confidence in your drive and your determination, Chris, because that has come through every time when you guys are together, it’s very easy to see how you guys work off of each other and…
Chris Amatos: Absolutely.
Ed Siddell: And like you said, you brought up the fact that you had some struggles, trying to get things going, like any small business,.right? And as a reporter, you know the stats better than I do. So, how many small businesses don’t make it after the first couple of years? It’s a really high percentage, isn’t it?
Chris Amatos: It is a very high percentage. In fact, I was looking at some numbers earlier today just in preparation for the call, and I was looking at one of the reasons, one of the advantages of doing a franchise first is starting out on your own. And the failure rate for people who do a franchise is much, much lower than people who start a business on their own.
Ed Siddell: Is that because of the processes?
Chris Amatos: It’s something like– exactly. The process is, I mean, one of the things, when you’re buying a franchise, what are you buying? Well, ideally, you are buying a concept that has already been proven to work. And there are a zillion questions you need to ask. If this is something you think about doing, you need to ask any franchisor about their system and you need to ask the existing franchisees as well, again, to see if it’s a good fit for you. And a lot of information is spelled out again in the FDD, the franchise disclosure document, that is required by the FTC to be given to a prospective franchisee. So, that’s an important document to get, but there’s only so much that those documents are going to tell you.
Among the things that it is not going to tell you is how much money you’re going to make. A franchisor can give you some like revenue ranges that you can expect that existing franchisees had experienced, but they’re not going to tell you how much money you’re going to make. I’m not an attorney by any means. I don’t think that they are prohibited from telling you, but if they do put that in there, then they’re liable for it.
Ed Siddell: Absolutely.
Chris Amatos: None of them are going to be so foolish as to make that kind of a guarantee. So, they’ll give you some revenue ranges, but they’re not going to tell you how much income they’re going to have. Now, once you sign up and have paid your franchise fee, then they’re going to give you some better guidance about what you can expect, but you’re not going to basically need to do a lot of that kind of research on your own. And the way to do that is to talk to the existing franchisees.
So, when you get that FDD, it’s going to include the names and contact information of the existing franchisees and anybody who, again, is looking to buy a franchise, they really need to do their due diligence and ask a lot of questions. And I wrote some of these down. I thought this might be helpful to…
LeAnne Siddell: Yeah, it’s definitely.
Chris Amatos: So, I’m going to want to– go ahead.
Ed Siddell: I was going to say, so how many did you reach out and contact?
Chris Amatos: Gosh, that’s a good question, because it was almost eight, nine years ago now. I probably talked to at least 10 and there were some others I’d probably tried to reach out to but wasn’t able to get a hold of for one reason or another. And in retrospect, I would reach out to many more now and I would make it a point to reach out to a wider variety, both geographically and maybe in terms of years of experience in the business. And all that information is largely available in that FDD, just didn’t know how to read it, but they will tell you basically when that franchisee opened his business and so that will give you an idea of who you can talk to, has been in there for a while versus someone who just opened up maybe a year ago. And then, of course, geographically, that’s easy to determine by the addresses, but yeah, I mean, talking to a broad range is critical.
And typically, at least in my experience, when you talk to a franchisor, they’re going to give you the names and addresses of franchisees that they want you to talk to, which is fine. You can talk to those both, but you need to make sure that you talk to some others as well.
Ed Siddell: So, what were some of the questions that you asked?
Chris Amatos: So, among the questions you want to ask, some of these are pretty basic. And a lot of this is going to be spelled out, but again, you need to make sure you understand it. Are you going to have an exclusive territory, for example? And if so, what is it? How is it measured? Is it going to be measured in population? Some are units per 100,000 or whatever happens to be the population. Or is it measured in miles or is it measured in drive time? But the question you really want to ask are the things that are not in that FDD, for example, how good is the franchisor about communicating with its franchisees? What is the quality of the communications? They do it on a regular basis. Do they return phone calls, if you’ve got a problem?
Ed Siddell: Yeah. That’s kind of…
Chris Amatos: How you’re going to be able to– yeah, exactly. Are you going to be able to get an answer that day? Or are you going to get an answer in two to three days? How good is the company’s technical support? Do they have their own IT department, for example, because pretty much, everybody has to have some sort of these support these days? How good is the company’s marketing support? Or do they even provide marketing support? That’s a critical question today. Are they going to manage, for example, your search engine optimization function? Or is that something that you’re going to have to do yourself? What about Internet presence? Are they going to manage your Facebook page? Are they going to do the Instagram posts? Are they going to do the market research for you to help you determine what the prospective market is for and you might be thinking about?
I would ask the franchisees and this is something I didn’t do at the time, but I would certainly. Again, I learned this from experience and this is not to say that my company doesn’t do this, but I would ask, does the franchisor do what they say they’re going to do? I mean, they say they’re going to give you all the support, and your experience as a franchisee that they do what they said they were going to do. That’s the kind of stuff you’re never going to find written down in a franchise disclosure document.
Ed Siddell: Yeah, and that’s really important. Well, so let me ask you this, Chris.
Chris Amatos: Sure.
Ed Siddell: So, what did you learn from last year? Because I know it was tough for everybody and you really started kind of the ball really turned for you right before last year. So, what did you learn from last year? I mean, how did your marketing change those kind of things?
Chris Amatos: So, that’s a great question because we have– so, first of all, Hand & Stone is a membership-based business, which is different from many other franchises. And that was a real advantage to us during the whole COVID situation. And I’m very proud, I think that says a lot about our brand and I think that says a lot about our business as well. We were closed for two months during COVID. We closed March 16th, and we opened on May 17th of 2020. During that two months, because we are a membership-based business, most of our members continued to pay their monthly fee. And there’s a reason they did that. And that is because as a membership-based business, when our clients are buying, it’s not time like you would be paying for it if you’re joining a gym or something like that, you’re paying for a service. And if you do not use your service one month, that rolls over to the next.
Ed Siddell: Oh, wow. Oh, that’s huge.
Chris Amatos: So, our clients knew that when we reopened, they would have those services to use. And your services at Hand & Stone never expire as long as you’re a member. So, if you don’t go for four months, for whatever reason, when you come back, you’ve got four services to use.
Ed Siddell: And you were busy as all get out. I always want to know…
Chris Amatos: Absolutely. When we reopened on May 17th, we were going gangbusters. I mean, we really did. Our membership sales accelerated. We were almost fully booked all the time because people wanted to get and use those services.
LeAnne Siddell: A lot of stressed-out people.
Chris Amatos: Yes, a lot of stressed-out people. That’s exactly right. I mean, what did COVID do? I mean, a lot of stress and tension with everybody’s life.
LeAnne Siddell: Yeah.
Chris Amatos: And there were people who wanted to come in and take advantage of those services and learn to relax. And I think, to an even greater degree, people who hadn’t given this kind of a service much of a consideration before, started to think, yeah, this is something I could really use right now. And so, again, not only did our existing customers come into the business to use our services, but we picked up a lot of new clients as well.
Ed Siddell: Because a lot of people are like, it’s time, after what we just went through. Yeah. Let’s go ahead and treat ourselves. Let’s enjoy life.
Chris Amatos: That’s exactly it.
Ed Siddell: Yep.
Chris Amatos: And it’s an inexpensive treat. I mean, again, our membership is $60 a month that entitles you to one massage or one facial a month, your choice. So, it’s an affordable luxury.
Ed Siddell: No brainer.
Chris Amatos: Yeah. And so, again, people came in, and we frankly haven’t really slowed down since we reopened last May. So, I mean, we were in a unique situation. Not many businesses benefited from COVID, but we kind of did, frankly, I mean…
Ed Siddell: So, even though you were shut down for two months, because of the membership, I mean, you really didn’t lose any revenue. I mean, you actually…
Chris Amatos: We lost some. Yeah, we lost some, but I mean, we had certainly had enough revenue that we could pay our rent, we could pay our utilities, and we had no difficulty meeting the obligations we needed to meet. And I mean, again, it was a blessing in disguise, kind of, because I almost feel bad about it, because if I had been in the restaurant business, we would have been hurt really badly, or a lot of other businesses were hurt really badly because I was just fortunate enough to pick the right franchise model. Back in 2013, of course, never, ever, ever expecting anything like this to happen. It worked out for the best.
Chris Amatos: So, yeah, we were one of the ones that benefited from COVID.
Ed Siddell: Well, I mean, as we’re going through this and we’re talking to businesses just like yours, it’s the same kind of theme. It’s the people that they’re working with. It’s doing the little things. I mean, you’re talking about lucky, but you were lucky because you did the research ahead of time. You were following that process and you had that business plan already in place, which was the franchise, right?
LeAnne Siddell: And one thing that…
Chris Amatos: Yeah, that’s certainly true.
LeAnne Siddell: And the biggest component of that is based on this being a membership, it’s a relationship. You don’t just have a one and done, you’ve got long-term relationships that you’ve built with your current clients going into COVID and now, the new clients that came on board afterwards, so.
Ed Siddell: And they keep coming back because of you and your team.
Chris Amatos: Well, that’s absolutely true.
Ed Siddell: Yeah.
Chris Amatos: Yeah. I mean, we certainly couldn’t take them for granted during this period. We did communicate with them. We explained to them that, look, we’re all going through a difficult time. If you keep their membership current with us, we will reward you with a free service when we reopen. We gave everybody who stayed with us a gift card for a free massage or a free facial. So, there was certainly some cost involved in that, but it was well worth that. We were happy to do it because our members mean everything to us and we want to make sure that we don’t take them for granted and that they know how much we appreciate them, so.
LeAnne Siddell: Well, I think all of us were in a position where we broke everybody’s heart to see businesses closed down that we had gone to on an every-week or a regular basis. So, supporting small business, I’m sure that it was not hard for your members to see that and want to support you, but, Chris, I want to make sure that whoever wants to get a hold of you or can you give us some contact information? How can people reach out to you? What’s the best way?
Ed Siddell: Where can they find you?
LeAnne Siddell: Yeah.
Chris Amatos: Sure. So, our business is– we are adjacent to the Polaris mall. The business address is 1190 Polaris Parkway. We are in the same shopping center as the Big Sandy Superstore and PetSmart. So, we’re in one of the strip centers that is just outside of the mall. And I’ll be happy to talk to anybody in terms of what experiences I’ve gone through, what to think about in terms of a franchise, if you want to go down that direction.
Ed Siddell: That’s awesome.
Chris Amatos: Anybody can give me a call. My phone number is (614) 929-4278. I’m happy to take calls. And if they want to reach out to me via email, it’s simply email@example.com, and Hand and Stone is all spelled out, one word. So, absolutely happy to talk to anybody, if they have any questions or would like more information about the business or whatever happens.
LeAnne Siddell: That’s awesome.
Ed Siddell: And what’s your website, Chris?
LeAnne Siddell: Perfect. That’s what I was just getting. We’ll have the links set up on our podcast page, The Retirement Trainer, but I’m going to– if you know of any small businesses in the Columbus area and want to learn and you give us the opportunity to learn a little bit more about what you overcame during this last very difficult year of 2020, we’re looking to support and grow and learn more about these small businesses who made it through 2020. So, if you have a small business success story, please give us a call at (614) 526-4118, or email us at info@EGSI.com. Find out more about us on our website, which is www.EGSIFinancial.com. Thanks so much for this time Chris. I really appreciate it. Thanks, Ed.