Massage Parlor School 101.

You don't need an MBA to know that running a massage parlor COULD be a highly profitable business venture. But with high reward, usually comes high risk. We at RubMaps have never ran a massage parlor, so the below entry is pure speculation based on conjecture and theory. For this entry, we will start with the least risky massage parlor business—the Foot Massage Parlor.

 At an entry level, it seems that the lowest level massage parlor that one can open is a Foot Massage joint. You normally find these at the malls, at county fairs or wherever there is tons of foot traffic and tired feet! The foot massage joints you see sprouting up everywhere from Cupertino, CA to Orlando, FL all have one thing in common--ugly women and mostly men all from mainland China willing to give you a relaxing, legitimate foot rub for usually around $20-$30 per hour. How do they do it for so little do you ask? This isn’t a massage at the 4 Seasons Hotel, so we must first look at the inputs involved. The main cost driver for these foot massage joints are the Chinese workers involved. They are most likely undocumented workers who speak very little English—so they can be had for under $10 an hour. That leave a net margin of around $10-$20 per hour/per worker. If the average Chinese worker provides 10 massages in a day, each massage parlor  worker is worth roughly $15 (average net margin) * 10 = $150 gross margin to the shop. Factor in overhead (rent, electricity, those fancy leather chairs and possibly food for the worker) at roughly 30%, you are still left with $150 * .70 = $105 per worker per day. At 5 days a week, this worker just made the foot massage parlor owner $525 richer. The average number of Chinese workers in a California foot massage parlor ranges anywhere from 3-15. Hence, we can safely say that the massage joint makes $525 * 3 = $1,575 a week net profit, upwards to $7,875 a week.

Annually (not subtracting for bribes to pay out the gangs/police/mms/etc.), the average foot massage parlor joint earns roughly $81,900 (low estimate, shitty location) to $409,500 (high estimate, probably a retail mall location). Risk is roughly 0.

**Also note, that we did not include the tax benefits in running a mostly cash based business. We can see why these places are sprouting out of nowhere. Most owners normally don’t stop at 1 location, they expand and own several. Once they hit 4-5 locations a year, they are earning in excess of $1MM a year.**

The downside to these calculations is the assumption that they are busy and can handle at a minimum of 10 customers per day (per worker). It would be safe to say that if a fott massage parlor can stay in business for at least 1.5 years (18 month), they will hit these numbers in terms of profitability.

What are some other variables to think about before opening up a foot massage parlor locations? Besides finding a location which has a desirable amount of foot traffic…one needs to be able to find the cheap Chinese workers, as well as a very good MMS (mamasan) or PPS (papasan) to run the location. This is key, and a good MMS or PPS doesn’t come cheap—I once heard that a good MMS in Torrance, CA running a foot massage parlor earned $150,000 a year (in cash). She was rare though since she spoke perfect English, Thai, Chinese and Korean.

That is it for today folks. Stay tuned for our next segment where we dissect the profitability of a FS massage parlor. 

Happy hunting!

- Mongo