August 2, 2016

Nine years after Lee Oberg launched Massage Retreat & Spa, the former Life Time Fitness executive is ready to grow the company through franchising.  Based in New Hope with 10 corporate employees, Massage Retreat’s services include massages, facials, waxing and other treatments.

He recently spoke with the Business Journal for a story that’s been edited for length and clarity.

How did Massage Retreat come to be? I looked at the Massage Envy concept. This was in 2005 and I knew those guys because they used to work for Bally’s [Total Fitness]. I said, if they can do it, let me look at it. I thought it was an interesting concept.

I did my first one in Plymouth in 2007. We opened in Edina in 2010, and then in 2012 we opened in Savage and Shoreview. In 2013 we opened in Woodbury, Maple Grove and Eden Prairie. So we had seven and then in 2015, we started franchising and we ended up selling our Maple Grove location to a semi-absentee group that saw the growth in the industry of massage and skin, and liked our model. They liked the idea that they could come in and keep their day jobs. It was already set up, they had an existing membership base, cash flowing, so it was a great model for somebody who wanted to get into franchising without having to be there on a day-to-day basis and operating.

And you want to keep franchising? We are at the point where our whole focus is to franchise here in Minnesota. People will ask, “Why don’t you franchise elsewhere?” You only have one shot to do it well and the idea is we have a team here building systems and putting things in place to support the franchise. Our whole focus is to open up 12 locations over the next three years. We are looking for empire builders and an empire builder would be somebody who wants to do three or more. We are going to actually sell our existing locations as part of our franchising.

What are your same-store sales numbers like? All of them are over $1 million spas. Your high ones are like $1.3 [million] or $1.4 million. Your growth is somewhere between 3 and 5 percent a year. Pretty good. And the nice thing is we started in 2007, which was difficult times, and our business has continued to grow. We make it affordable through our healthy saving program. We have over 7,000 members in the Twin Cities who pay $59.95 [a month]. On average, we add approximately 300 new members a month.

You worked in Arizona in the 1990s. Doing what? I was out there running clubs. I got into doing these events. I owned a company called Arizona Events and I produced festivals. I did George Strait’s country music festival and produced Taste of Arizona. At about that time I had a child and I ran into [Life Time CEO] Bahram Akradi at a George Strait show here at the Metrodome. He was at nine locations and I was ready to come back here with my family. So I came back and re-joined him as his marketing director and we grew to maybe 30 locations [before I left for health club chain Wellbridge].

Lee Oberg
President and CEO, Massage Retreat & Spa
Age: 57
Family: Single with two sons
Education: Associate’s degree from Minnesota School of Business

Nick Halter covers retail and sports business with Minneapolis/St.Paul Business Journal.