Why You Should Find a Franchise with a Monthly Recurring Revenue
As a business owner, there are few things more important than a consistent recurring revenue stream. Franchisees go into business for and are dependent on successful business models, and one of the most proven business models available is monthly recurring revenue.
Investopedia defines recurring revenue as “the portion of a company's revenue that is expected to continue in the future.” Unlike one-off sales, these revenues are predictable, stable, and can be counted on to occur at regular intervals going forward with a relatively high degree of certainty.
Spa and wellness-related franchises are perfectly positioned for recurring revenue plans due to their auto-renewing contracts and memberships. A majority of the products and services in those industries are set up as subscription-based plans that generate revenue and make a profit.
True REST Float Spa's recurring revenue model is in the form of memberships, with a clear value proposition. Members join True REST Float Spa because there is a low commitment. They can cancel anytime with only one-month notice. Their memberships are also sharable and sustainable. Member floats may be shared with up to three authorized users, and all unused floats roll over from month to month.
At True REST Float Spa, approximately 55% of a franchisee's revenue is generated from current recurring memberships. And on average, for every 50 members a month, that amounts to $3,200 to 3,500 in revenue – whether they float or not. The True REST Float Spa goal is 100 members per pod.
Prospective franchisees should also look for a franchise partner that makes a practice of sharing best practices to maximize recurring revenue—systemwide. Throughout the years, True REST Float Spa has collected best practices from our franchisees that we regularly share on monthly calls and at our annual conference. Some examples include:
Celebrate Members: Every time you get a new member, treat them like a friend. One True REST Float Spa franchise owner takes this practice literally and turns every member into a friend. They take their picture, post it on their local Facebook page, send personalized emails and cards, and even call to ensure they are enjoying the experience. Those personal touches make a huge difference and can be directly connected to that franchise owner's financial performance, member retention, and loyalty. At that particular location, each member is a True REST Float Spa brand ambassador and promotor among their own circle of family and friends.
Set Time Aside to Market Your Franchise: As an owner, you are your brand’s best spokesperson. Franchisees must dedicate and schedule time monthly to focus on franchise marketing. More specifically – talk to people. As an invested franchise owner, there is a reason you bought into your system. Sharing your personal story of why you believe in the service or product you are selling is the best form of advertising. A flyer can't do that. Neither can a Groupon. Only you. Nothing beats word-of-mouth marketing within your community. This can be done in multiple ways, including speaking at a local organization, visiting with like-minded companies, participating in a health and wellness fair, or just talking to someone in line at the grocery store.
Practice Your Pitch: True Rest franchise owner Martha Reed says, “I am absolutely without doubt in the right place, doing the right thing. This is new, this is something that's emerging, and I have the intuition and the nudge that's telling me to do it. After university training, there is no doubt in mind, floating needs to be out there. This is a missing element in the world of natural healing.”
Capitalize on Free Trials: Don't be afraid to offer someone a discount or a free trial. As a franchise owner, your No. 1 priority should be getting people to walk through your door. You know your conversion rate (first-time guests that buy a membership), so the expense of a free trial or a discount should be worth the cost of acquisition. Personally, I carry $30 off coupons with me at all times. I literally hand them out to every person I meet – from Uber drivers to people at coffee shops, to people in line at the store. I also carry a free float card to give to people who can be a referral source. Rideshare drivers are a great example. I give them two free float cards, invite them to come in, and experience floating, and encourage them to give the other card away to a passenger. It works!
While recurring revenue streams can be achieved through contracts, reminders, and billing, we recognize that each member poses a unique opportunity to become our biggest advocate. We at True REST Float Spa have always maintained the goal to provide excellent customer service that can improve people's lives. And this goes beyond just helping individuals with aches and pains.
How you treat your valuable members is a direct reflection of the kind of business you want to run. Our focus, however, has always been to give customers the best possible service and support. Because we know all too well: a happy customer means a repeat customer. And therein lies the secret ingredient of the recipe on how to sustain recurring revenue stream.
Share this Feature
Comments:comments powered by Disqus
- Multi-Unit Franchising
- Get Started in Franchising
- Open New Units
- Featured Franchise Stories