Business Review 3: Massage Centres

What's the difference between a massage centre and a foodcourt? At first I didn't think there were any similarities until I was enlightened by how massage centres operate from a friend...

My friend told me that massage centre bosses usually get their employees from referrals from their current employees. He would help to arrange the travel documentation and provide them accommodation. I used to think that accommodation and food would be included in their employment agreement, but according to my friend, it isn't. Accommodation rental is charged to the masseurs, together with other services like food catering and transportation. This is where I think is the brilliant aspect of this business.

The massage centre bosses have 2 income streams:

1. paying customers who come for a massage
2. their own staff who pay - royalty for each massage transaction, rental for accommodation, charges for transportation, food, travel documents, etc

So even when a massage centre has zero customers, income derived from his own staff can offset some of the fixed charges he has to pay. The massage centre boss is basically creating an environment for the employees to work and make money, while charging "rental" as an income stream. Once again, the concept of helping others make money applies here.

If you put this in the context of a typical foodcourt, the masseurs are renting the place like renting a stall which requires them to pay a rental to the foodcourt owner. The foodcourt owner sells drinks and the volume of drinks he can sell is dependent on the quantity of customers who patronise the foodcourt. The quantity of customers is dependent on the pulling power of the stalls collectively. This foodcourt drinks business is like the royalty the boss earns from every massage service carried out by the masseurs. The boss has to ensure the quality of massage remains at a high standard to pull in crowds because this will not only increase the amount of money he receives from the royalties ("drinks" business), but also the chargable services ("rental" business) he earns from the masseurs. When masseurs can make money, they will recommend friends or family members to come work for the boss, which increases the income derived from his "rental" business. 1 action can grow 2 streams of income. You can consider it unethical or inhumane the way some of the bosses run their businesses, but as an income-generating business model, it is simply brilliant...