When a brand announces itself as India’s first chain of ‘affordable health spas’, the seeming oxymoron catches one’s attention. Mumbai-based The Four Fountains Spa’s unique selling proposition is providing first-class spa treatments at a price far below the average five-star spa pricing. Quiz founder-director Sunil Rao about the brainwave and he says, “My co-founders and I were in fairly stressful jobs that involved a lot of travel and hotel stays. Despite being reasonably well-paid we could not afford a relaxing massage at the hotel spas due to the exorbitant prices.” This is when they realised that if India’s working professional had to relieve his stress, spa therapies would have to be made more affordable. Their common experience was an inspiration to start a chain of spas that put luxury within reach of the common man. A comparison of prices between The Four Fountains Spa and a health spa at a five-star hotel substantiates their case. While a basic treatment such as a full-body massage costs upwards of Rs. 4,000 at the latter, at The Four Fountains Spa in Mumbai, it costs anywhere between Rs. 1,599 and Rs. 1,899 depending upon the therapy. Adding to the affordability factor was the ease factor which reflects in the spa menu. “Our spa menu is a first-of-its-kind that demystifies spa therapies into categories (de-stressing, de-toxification, immunity and beauty) rather than by type (massages, facials, body polishes and body wraps) which guests find useful,” adds Rao.
The founding team began testing their concept with over 300 first-time as well as frequent consumers of spa services including a cross-section of working professionals, housewives and businessmen. The major findings amounted to this – apart from high prices, lack of availability, lack of awareness and privacy concerns were major reasons why many people did not try spas. “We used this input to refine our concept and eventually launched two spas in Pune in 2007,” says Rao. Today, the chain runs 11 spas at locations including Pune, Mumbai, Goa, Manali, Aurangabad and Bhopal, through the venture-funded company CMYK Health Boutique. Rao says there has been a deliberate mix between Tier-I and II cities to judge the robustness of the company’s business model.
The distinct difference between locations is the type of spa established. For instance, the spas at Pune, Mumbai and Bhopal are day spas while those at Goa and Manali are located within a resort, open only to the guests who vacation there. At Aurangabad, the spa is located in a business hotel, but, also functions as a day spa. “Footfalls and revenues are different in case of spas located in resorts as they have fewer therapy rooms. Besides, they also tend to experience more seasonality than day spas,” says Rao while adding future ventures will most likely be day spas.
Handling the challenges
While speaking of the primary challenges in this business, Rao says, “The most challenging aspect about this business is educating people about the health benefits of taking spa therapies. In India, spa therapies are viewed as a luxury, and not as an investment in one’s health.” To get past this mindset, The Four Fountains Spa educates clients on scientifically proven health benefits of taking spa therapies, besides which, the treatments speak for themselves. Manpower also poses a problem as Rao rues the lack of trained spa therapists. The company took this challenge head on and established a training academy in Mumbai where it trains even fresh recruits in the science and art of spa therapies.
As for escalating rental costs, The Four Fountains Spa has devised a revenue-sharing model at some of its locations. “A revenue-sharing arrangement is a win-win arrangement for both us as well as the landlord. It not only helps us reduce rental costs when a spa is still ramping up, but, also provides our partner (hotel or franchisee) a chance to participate in the up-side when business is booming,” says Rao.
Expansion plans need to be backed by systems to ensure that opening a spa at a new location is a process sans glitches. The Four Fountains Spa relies on a manual that has architecture guidelines, material specifications, names of approved vendors, cost benchmarks, sources of recruitment, training material, launch marketing activities and everything else needed to plan a new spa launch. Rao elaborates, “We follow project management techniques that help us break the project down to activities and tasks with deadlines and responsibilities.” A typical new spa launch requires many things to come together. For example, completion of spa interiors and training of manpower need to happen in tandem. Launch marketing activities need to be finalised well before the spa is ready. Consumables need to be ordered just in time in order to manage working capital efficiently. And the manual is a consolidated effort that documents past experiences to help focus collective energy on the most important details.
A significant challenge that daunts any startup is that of procuring finance. The Four Fountains Spa too, had to knock on many doors before money came its way. Funding from an angel investor fund, Chennai-based Fulcrum Venture India, was used to start two spas in Pune in October, 2007. “Our second round of funding was also raised from the same fund and was used for our expansion to Mumbai in 2010,” shares Rao.
The Four Fountains Spa has undertaken several activities to ensure that its brand enjoys high recall amongst its target audience. Rao explains, “First of these is a mobile spa which consists of a team of therapists who provides short, non-oil spa therapies (like a 10 minute foot reflexology massage or a neck-shoulder massage) at high footfall locations like malls, offices and multiplexes. This introduces the idea of spas and massages to many first-time spa-goers and many of our guests who visit our spas today were initiated into spas through this activity.”
Rao adds that the company has created a comprehensive booklet called ‘A Beginners Guide To Spas’ which answers frequently asked questions about spas, benefits of spa therapies, spa etiquette and more. It distributes this guide free of cost to as many people as possible in order to create awareness about what they can expect at The Four Fountains Spa in particular.
Looking to the future, The Four Fountains Spa has charted out an ambitious road map for growth. “In the next two years, we plan to expand aggressively through the franchisee-owned, franchisee-operated route both in our current cities as well as new cities (Bengaluru, New Delhi, Hyderabad, Chennai and Kolkata). We have also been receiving many franchisee enquiries from smaller cities like Jaipur, Ahmedabad, Nagpur and we will be present in most of them too,” says Rao. As he signs off, Rao shares his five-year growth plan for The Four Fountains Spa – “In five years time, we will be present at 300 locations in the top 20 cities of India.”
Concept in Brief
The founders of The Four Fountains Spa strongly believe that the Indian market is ready for a chain of ‘affordable spas’. It seems like the mantra at the company is to deliver a wonderful spa experience at a comparatively affordable price. At The Smart CEO we believe that the progress it has made in the first few years of operations is commendable. Going forward, we believe the key will be to expand at a robust pace and stay on track to reach its target of 300 locations within the next five years. During this growth, operational efficiency will be the key. The other important strategic aspect that needs to be kept in mind is, as the number of outlets grow, it’ll have to attract more and more customers –including many first timers – into its spas. Its ‘Beginners Guide To Spas’ manual to educate consumers about the advatage of spa therapies and ‘mobile spa’, which is used as a marketing vehicle, are good ideas to grow the consumer market.